Manufacturers may set a fixed price for their products and forbid retailers from offering discounts, the Supreme Court said today, overturning a nearly century-old rule of antitrust law that prohibited retail price fixing.
The 5-4 ruling may be felt by shoppers, including those who buy on the Internet. It permits manufacturers to adopt and enforce what lawyers called “resale price maintenance agreements” that forbid discounting.
The decision, coming on the last day of the court’s term, was the 15th this year that benefits business and corporations by shielding them from lawsuits and legal claims.
Surprise, surprise.
#15: No, not the RIAA, but the record labels can tell Costco and Wal-Mart to sell CDs at whatever price they say.
noname, lateral price fixing is still illegal. You won’t notice any changes to speak of.
I pity some of you City folk…
Time to grow my garden, and to get a small calf and a goat..
At most I can move out of this town, about 1 mile, and save Even more.
@5 “How has iPod’s price fixing hurt anyone?”
Consumers are hurt to the extent that retailers are unable to compete effectively. It’s Economics 101
Apple does everything in its power to limit discounting of iPods, including the use of Minimum Advertised Pricing (MAPs).
As my linked article above, that links to a Slate article that says, “In 2000, the Federal Trade Commission forced the five major record labels to suspend MAP policies that it deemed excessively restrictive. MAP benefits manufacturers and, to a lesser extent, retailers, but not necessarily consumers.”
Consumers lose out by not getting the lower price that would result if the market was functioning without these kinds of practices. The increased cost per unit hurts the consumer.
“If they were gouging, RCA Lira sales would go up.”
Not necessarily. You’re assuming that the products are completely fungible, which is rarely the case. They’re simply competitive as was the criteria @20. For a variety of reasons, Apple has been able to position itself as producing a unique product.
33# JimR, let’s wait a couple quarters and see if average Joe Six pack can distinguish between your illegal lateral price fixing and retail price fixing?
Since our government never lies to its governed, you know our government won’t report a increase in core inflation, politician have NO WAYS of not manipulating the truth.
I fucking hate what this country is turning into. Even if all the goddamn neo-fascist Republicans get booted out of office tomorrow, this country is still screwed over for another 25 years, give or take, because of the stacked Supreme Joke…err, Court.
I am seriously reconsidering my stance on the 2nd Amendment…
Yeah, it’s I guess a little harder to get those free movie downloads. You might have to pay some money. And now you can’t compare models at Best BUy and then come home and get a dirt cheap price on the same item online.
What a bunch of drama queens. I hate to think of the hardship you will endure when the price of the latest Ashley Simpson CD goes up.
If you think something costs too much, don’t buy it. If enough people think the price of something is too high, the manufacturer will either lower the price or go out of business.
Did you ever stop to think that the reason the country is the way it is right now might have something to do with the Supreme Court having been so liberally biased for so long?
#39 All American (yea right!)
To answer your question directly
Q: Did you ever stop to think that the reason the country is the way it is right now might have something to do with the Supreme Court having been so liberally biased for so long?
A: YES I have stopped to think.
NO, Wal Marts prices and free movie downloads have nothing to do he Supreme Court having been so liberally biased for so long
39—One of the biggest problems GOUSA faces is free market imbeciles putting corporations ahead of citizens. Image the NEW Republicon Approved Activist Supreme Court opining that “Corporation have free speech rights” subverting the effort for an election based on ideas rather than tax supported money spent?
In most ways I can think of, the country is the way it is because of Congress failing to check and balance the excesses of the President. Happens with one party controls both branches, and that happens too often.
Boy that embarrassing. I blame it on publik skools. I will copy edit my crap before I submit.
@35, @5 “How has iPod’s price fixing hurt anyone?” “Consumers are hurt to the extent that retailers are unable to compete effectively. It’s Economics 101”
Your statement makes no sense.
If everyone sells a unique product at the same price, there is NO competition between retailers for that product.. The playing field is level for that product. Every retailer has the SAME chance.
42—-I am no economist “but”==
Hypo–
Retailers selling price fixed items making $10 profit.
Retailer X decides to enter the free market and sell Ipod for $5 less than the competition. Sales go thru the roof.
Everybody comes out a winner except its against the vertical monopoly?
How is it again that the consumers or Retailer X benefit?
Basic economics and non-politically motivated economists, history and horse sense agree: when the government enables and enforces price setting capabilities for a group, any group, the result is higher prices for consumers in the best of cases, black markets and violent crime when things get tough. (Through power groups, nepotism and such, the government in so doing is trying to favor its favorites by the attempted overruling of supply and demand.) This is not a good development.
When lower prices are possible elsewhere (for instance, outside the USA -beyond SCOTUS’ reach -even with shipping), people will tend to buy from there. What then? More legislation? Who’ll hurt? Let’s guess…
As stated: this is not good.
First, there is a lot of competition to the iPod. Anyone is free to come up with a better player, better marketing and better pricing. It’s still a free market regardless of what Apple charges, fixed or not.
An iPod is not a disposable so the market is finite. With your example, retailer X who undercuts the price is stealing business from the other retailers A-Z.
That’s fine, but the alternative is to set a price that is fair and everyone gets the same deal. If it’s too expensive, then buyers will buy a similar item for better value and Apple will lose. The risk is Apples, not the retailer’s. More often than not, there is very little markup in a fixed price item, and the tendency for retailers is to try and RAISE the price on popular items, not lower it. Watch Ebay when iPhones get sold out.
Also… “The court’s latest decision said agreements on minimum prices are legal if they promote competition, meaning accusations of antitrust violations will be evaluated case by case.” (from Yahoo Finance)
45—So your ox is the Manufacturer (sic) and the authorized retailers, not the consumer. thats fine, just don’t post again that consumers wont be injured by vertical retail price fixing.
THATS WHY IT WAS ILLEGAL FOR 100 YEARS!!!!!!!!
I can just imagine the gas prices now…
I immediately discount any statement made that is preceded or followed by “It’s Economics 101” from somebody who I don’t know to have an actual degree in economics.
50–What do you think of people posting that forcing consumers to pay more for a product is good for them?
#51, That’s actually not something I’m particularly concerned about. But people also need to take into consideration what markets they are talking about when making their claims. The reaction I’m reading from many is that now the prices for everything is going to go up because of price fixing. Maybe that could happen to some degree in a market where monopolistic competition exists, but in perfectly competitive commodity type markets where brands don’t matter because product A is the same as product B, as far as the consumer is concerned, I don’t see how this will have any impact at all. The price of gas and milk isn’t going to go up because of vertically fixed pricing agreements between manufacturers and resellers.
52–so you agree that parts of the market will go up if they aren’t perfect resulting in higher prices to the consumer. I agree, so we also agree this activist ruling by the court is another pro big business win at the expense of the consumer. How many hits can the middle class take?
Looks like we are finding out.
#53, No, I don’t believe I did agree. Just because I say something could happen, given a particular type of market, does not mean it will happen.
54—So suppliers with a monopoly with no completing products “could” but not necessarily will raise their prices (aka set enforceable prices with their retailers) but they could choose not to do so?
Ok.
Look, this happens all the time. I think people are reading too much into this ruling. Kelloggs sets the price of its cereal almost everywhere. Prices of high-priced electronics are usually set by the manufacturers. My guess is this ruling is very technical, and the media as usual wrote up a kneejerk liberal reaction, and put up an anti-business explanation. Like I said at the top, when it comes to court cases, I try to take a closer look and don’t just swallow the headlines and explanations coming from the media liberals. They were wrong about Cheney’s claim of exemption from the executive branch secrecy requirement, and they’re probably wrong about this.
57–I haven’t read the case, doubt if I ever will. Still, “overturning” a 100 year precedent” whatever that means “should mean” a change? Now, if the media just have it wrong, that will probably come out eventually.
Meanwhile, your defense of this anti-consumer/middle class/small business effect stands on its own regardless of what the case might say.
And thats all ok. SCOTUS is on your side. Just own up to it and avoid quibbling and obsfucation as you do.