Price Fixing Run Amok
Cruising through my 100’s of news e-mails I receive every morning I came across some news on a court case that expands on the legality of manufacturers setting the retail price.
I have vented about a practice called Unilateral Pricing on numerous occasions and now the Supreme Court is forced to evaluate it. The case is “Leegin Creative Leather Products Inc. v. PSKS Inc., d/b/a Kay’s Kloset”.
Basically the case goes like this: The Brighton line of women’s leather belts are made by Leegin Creative Leather Products who sells them through specialty retailers who agree to sell them at Leegin’s suggested retail prices. In 2002, Leegin learned that Kay’s Kloset in Lewisville, Texas, was selling their belts at below the suggested retail. Leegin cut off their supply and Kay’s Kloset took Leegin to court.
They successfully argued that setting minimum prices violates the Sherman Anti-Trust Act. Kay’s Kloset won the case and received more than $1 million in damages. The U.S. Court of Appeals for the Fifth Circuit in New Orleans upheld the judgment.
But it doesn’t end there.
Leegin appealed to the Supreme Court. Leegin wants the Supreme Court to overturn the “Dr. Miles precedent” — a 1911 case that established that “resale price maintenance,” letting manufacturers set minimum prices, was illegal under the Sherman Act.
Leegin contends that minimum prices aren’t necessarily anticompetitive and, if allowed to set them, manufacturers would still be able to compete in non-price areas such as customer service.
Bull shit!
All of us have been affected by this practice. The practice is prevalent in Home Theater, video games and home appliances… ever tried getting a Sub Zero fridge at a discount? It’s not possible because of Unilateral Pricing. How about Xbox or a PS2. Price fixing limits who can buy. Plus the manufacturer doesn’t take the hit. It’s the retailer who absorbs the loss.
With more companies and brands merging, this practice, if allowed to grow it will affect everything we buy and ultimately damage our economy. If manufacturers are allowed to set retail prices all of us will pay more and have less choice. I’d pay attention to this one.
You can read more here:
http://www.michigan.gov/ag/0,1607,7-164-34739_20942-44650–,00.html
http://blog.washingtonpost.com/thecheckout/2007/02/are_bargain_hunters_
about_to_l.html?nav=rss_blog















