Comments on: Should Manufacturers Be Allowed to Set Minimum Prices?

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By: Rob

Rob — Tue, 03 Jul 2007 21:33:10 +0000

Tim – Please name one necessary item where the manufacturer can set a minimum price and not have another existing manufacturer immediately sell the same thing at a lower price, or a new manufacturer come in and sell at the lower price. As long as there is true competition, the market will set the equilibrium price.

By: Tim

Tim — Tue, 03 Jul 2007 18:38:22 +0000

rob, i doubt it. this isn’t economic liberty, it is price fixing. we’re not talking about a slippery slope. now manufacturers can est. min prices on necessity items which we cannot choose not to buy.

By: JLP

JLP — Tue, 03 Jul 2007 16:54:29 +0000

Here’s my beef with this:

Allowing companies to set minimum prices that all retailers must charge is anti-free market. If one retailer wants to sell the product for less than they paid for it as a loss-leader in order to get customers into the stores, then that should be their right to do so. What difference does it make to the manufacturer if they get paid?

By: Rob

Rob — Tue, 03 Jul 2007 16:35:05 +0000

We all benefit from this change because it is one small step in the restoration of the economic liberty that has been stolen from us step by step in this country. If a middle man doesn’t like the manufacturer’s rules, he doesn’t have to sell the product, and then the manufacturer suffers. Same with consumers. If you don’t like Apple, buy some other MP3 player. Apple is only successful because people are willing to pay the price despite the competition. In that sense maybe iPods are underpriced. For every one company that wants to maintain a high price, there are 10 companies that are ready to sell an almost identical item at a lower price. That is competition, and it is much more reliable in terms of setting fair prices than government interference.

The only type of antitrust activity to really be concerned about is actual collusion among sellers of the same or very similar items to maintain higher prices. And even in those cases the collusion rarely holds up for long because of competition and greed – not only does it attract new entrants into the market, but each participant in the collusion has tremendous incentive to cheat.

By: John

John — Tue, 03 Jul 2007 13:29:20 +0000

It seems to me that this may take away a lot of competitive advantages. For online retailers they can’t pass on savings from not having a physical store. For large retailers that are willing to take a loss to get customers into the store they won’t be able to give huge discounts for things like Black Friday. Overall I don’t see how anyone but the manufacturers benefit from this change.

By: Baz L

Baz L — Tue, 03 Jul 2007 12:23:56 +0000

That’s just ridiculous. It’s up to them to set their price to the retailer. After that, it’s out of their hands.
–
Baz L
Day In The Life of Baz

By: Compounding

Compounding — Tue, 03 Jul 2007 01:15:41 +0000

I am fine with it in that the manufacturer should be allowed to do it if they choose… because, as a consumer, I can choose to buy it, or not.

Some companies manufacture products that cater to a certain group of people, and if they see it as inexpensive, they won’t buy it.

By: lorax

lorax — Mon, 02 Jul 2007 23:28:44 +0000

Err… “free market” “liberal trade” it’s all good for us in the long run. Eventually people will stop buying the high priced items (modulo some amount irrational behavior due to advertising) if they are not worth it or someone can make a better item cheaper. Basic Adam Smith stuff.

(Of course, in the long run we are all dead, but maybe our kids will be happy… or not.)

By: Kurt

Kurt — Mon, 02 Jul 2007 21:31:24 +0000

The imprtant thing to point out here (which no one does) is that it is no longer *automatically* illegal to require minimum prices. it will be determined on a case by case basis. Similar to how acquisitions are deemed to be anti competitive on a case by case basis. All SCOTUS said was the lower court should have listened to the arguments instead of applying precedent SCOTUS case law (that’s the big problem with scotus case law — it changes).