Supreme Court OKs Retail Price Floor

Paul_Johnson said:
You don't really think WalMart is going to stop discounting do you?
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Unrelated, but yeah, when they have a 100% market share on retail super stores.


Back on topic. You don't need to have a degree from Harvard to reason this out: Obviously someone had to fight for this decision. Someone felt it would benefit their interests if this restriction was removed.

That being said, it probably wasn't a consumer advocacy group that fought for this overturn (sarcasm). Go ahead and mark the consumer down and out.

I doubt it was a specific retailer that was fighting for this either, right (sarcasm)? So we can count the retailers down and out.

What does this leave? Manufacturers win. Why did they fight for a regulation held in place for half a century? Look at the composition of the supreme court... probably the worst for this country since the regulation was passed (however unrelated). The effects of the overturning will vary and no one can guess just how things will turn out, but you can feel safe to bet on the Manufacturers getting the longer straw.
 
How will this affect liquidation sales when companys go under? If they can't continue to mark down more and more, they will never get rid of some stuff.
 
k1pp3r said:
How will this affect liquidation sales when companys go under? If they can't continue to mark down more and more, they will never get rid of some stuff.
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I am not quite sure it would seem that if the Big Company won't let the product be liquidated then they might have to buy it bavk no? The other thing I can think of is they will just have to write it all off in the bankrupcy.

KM
 
Teddy Whossss-velt is turning over in his grave.

He'd take his big stick and smash the fking brains out of the members of this court...I suspect. :eek: :p :D
 
I almost have to say anyone who thinks this is good for the consumer is retarded. This is pretty much just a, now legal, way to screw the consumer.
 
The free market be damned...I like capitalism in general, but this decision is patently absurd. The consumers are screwed over, the retailers are screwed over, and the manufacturers get to have 100% of the control!

What makes this even more surprising to me personally is that the conservative bloc which I usually trust ended up siding with Kennedy in rendering this decision. Every justice who supported this should be ashamed.
 
Here is what I see;

Manufacturer does not benefit from a price floor at all. The price floor directly won't effect the price they sell at. If they want to sell higher, they could before. The only ones that will do a price floor are the ones that want to keep a "prestigous" name. Most of the manufacter's buyers are probably overpaying just for the name anyways. Like the company that was selling leather sofas. They think there product is so superior that they don't want anyone getting discounts.


So, most manufacturers won't put it in. If manufacturers don't put it in, then we don't have anything to worry about it. There might be some higher-end product that would normally buy on sale but won't because it doesn't go on sale. That is really only thing I see happeneing.


Also, there were already price floors existing. Pentair Pool Products sent a letter stating "if you are selling below these prices we won't give your points for the year." Points are for rewards for buying there products. So I would 90% of small companies kept the prices at that and the bigger companies were already charging that. Of course that isn't a exact price floor by "You must sell at this price or you won't be selling our products" but it still was effective.
 
There is no reason to support this. No matter how you look at it its either a bad thing, or changes little. Therefore it should not have passed.
 
MartinX said:
Yeah, this is going to be an inconvenience rather than a customer screwing though, say "Sony DVD player X" has a certain price floor, and the consumer wants that model, well maybe "nearly identical Phillips DVD player Y" has a lower price floor.

The customer has three choices, buy neither, buy the sony, buy the phillips, here's the beauty of it, if they buy the sony then it means that they were willing to pay that amount of money anyway, no harm no foul. If they buy the phillips, sony gets the message that their price floor is too high and they lower it to be competitive.

Pretty much how it worked before anyway.
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No it wasn't.

The retailer had the option to lower thier markup to move a product. Now they do not have that option. This essentially gives manufactures the ability and the backing of law to artifically set prices.
 
Spazilton said:
No it wasn't.

The retailer had the option to lower thier markup to move a product. Now they do not have that option. This essentially gives manufactures the ability and the backing of law to artifically set prices.
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Exactly, i don't see how they can pass this law whent he prosecute executives at companys for price fixing.

They are essentially throwing everything out the window that is in place now.
 
Shorehn said:
The free market be damned...I like capitalism in general, but this decision is patently absurd. The consumers are screwed over, the retailers are screwed over, and the manufacturers get to have 100% of the control!

What makes this even more surprising to me personally is that the conservative bloc which I usually trust ended up siding with Kennedy in rendering this decision. Every justice who supported this should be ashamed.
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1000000 % agree with the above,the decision is insane to say the least.
 
Man this country is going to hell in handbasket with the courts, congress and the president carrying it.
 
I know I've been playing too much Street Fighter, because everytime I see OKs I think it says KO'd. :eek:
 
Spazilton said:
No it wasn't.

The retailer had the option to lower thier markup to move a product. Now they do not have that option. This essentially gives manufactures the ability and the backing of law to artifically set prices.
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But they did that to sell product, the same decision just gets pushed back one step, with the retailers making the call the end consumer used to.

The big problem is that it's a step closer to allowing cartels, and makes price fixing harder to identify.

It does make it harder for big rich companies to corner the market using loss leaders though which helps guarantee consumer choice, for instance under the old system, if I was a big rich retailer, I could deliberately under price my stuff to levels where other retailers couldn't compete, driving them out of business. Once I had driven them out of the market I can go to the Manufacturers and say: "Hey, I'm your only outlet, here's the terms of our agreement, take it or go out of business too", and go to customers and say "Hey, I know that I've offered low, low prices in the past, but as you can't buy this stuff anywhere else I'm now going to charge whatever the hell I like, now hand over your wallet".

Over simplified, but it did happen.

Truthfully, I really don't think it makes much difference either way. If there's a sudden leap in the inflation rate, I was wrong.
 
Well price fixing is bad they can jack the prices and your screwed.
Also selling below cost of item just create monopolies.

Instead of setting floor prices they should just not sell below cost.

selling below cost the bigger richer company can take the cut back then when everyone buys from them and the other store go bankrupt they become a monopoly. Then they charge you to death cause its becomes inelastic.

I think a lot of people wish the judge were more educated. Some Judge make ruling on the internet and he can't grasp the term internet. Also make stupid laws like Ram is a legal form of document in the court. Once the power goes out the information is gone too unless they thought flash ram and regular ram were the same.

Missing a lot of edu..maction huh huh. Economics 101. Stop allowing dumb people rule you. Make high position people take national certifcation test yearly please people to raise the standards and IQ.
 
Mega2 said:
Well price fixing is bad they can jack the prices and your screwed.
Also selling below cost of item just create monopolies.

Instead of setting floor prices they should just not sell below cost.

selling below cost the bigger richer company can take the cut back then when everyone buys from them and the other store go bankrupt they become a monopoly. Then they charge you to death cause its becomes inelastic.

I think a lot of people wish the judge were more educated. Some Judge make ruling on the internet and he can't grasp the term internet. Also make stupid laws like Ram is a legal form of document in the court. Once the power goes out the information is gone too unless they thought flash ram and regular ram were the same.

Missing a lot of edu..maction huh huh. Economics 101. Stop allowing dumb people rule you. Make high position people take national certifcation test yearly please people to raise the standards and IQ.
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You say that like all economists would agree one way or the other.

As the saying goes: "If you laid all the economists in the world end-to-end, they still wouldn't reach a conclusion" :p
 
Holy smokes! A lot of you guys are being alarmist about this. It's really nothing to be concerned about.
The only ones that will do a price floor are the ones that want to keep a "prestigous" name.
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Regardless, this is not going to have too much of an effect on the consumer except, potentially, in markets where a manufacturer has a temporary monopoly on a product through patent laws. Once there is more than one competitor for something, price floors become a thing of the past.
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These are exactly right. You won't see any commodity spike in price because of this decision. If Chevron were to set their price floor at $4.00, the other gas companies would eat them alive. Remember, collusion to raise prices (also known as price fixing) is still illegal. Very much illegal. You know how Standard Oil got broken up a hundred years ago because of monopoly abuse? They're still terrified of that happening again. They wouldn't dare attempt to price fix. Heck, they're not price fixing now, and the politicians are still trying to nail them to the wall.
 
what about places like Big Lots, you all think I'll be able to find nice Black and Decker drills there for dirt cheap now?

Don't act like this is nothing and it's not going to hurt the consumer, a lot of us SURVIVE on "last gen" stuff at a discount.. I'm guessing most of you have computer parts you got for dirt cheap? Ok, the big ones aren't going to change, they have complete freedom on prices anyways (CPU, videocards, etc) but some reseller selling RAM or a HDD for dirt cheap?

How about computer games? You think EA wont take advantage of this? I promise this will effectively be the end of the 'bargain bin' with most games.

Music CDs? Movies?

How about cars, when a dealer wants to get rid of stock for a discontinued vehicle.. we all look for deals like this, but the MFG will be able to say "No, don't discount this car", right?

If I'm mistaken tell me, but if I'm not, don't say this isn't going to affect the consumer any.
 
k1pp3r said:
Exactly, i don't see how they can pass this law whent he prosecute executives at companys for price fixing.

They are essentially throwing everything out the window that is in place now.
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Because this isn't price fixing. Price fixing requires collusion among competitors not among manufacturers and their retailers. Price fixing is still illegal under this decision.
 
But like I said one manufacturer can see what the price floor is on his competitors products and raise his price floor to match. Get enough of this happening and it becomes legalized price fixing. No manufacturer ever talks to the other they just take actions based on what the other is doing.
 
The myth of predatory pricing: http://www.cato.org/pubs/pas/pa-169.html

In short: the doomsday scenario of walmart or some other big box store driving everyone out of business and then raising their own prices is all but impossible, and hugely overblown by alarmists.
 
econ 101 people. If nobody is willing to buy it at the advertised price, it doesn't matter if that price is $1 or $100. They wont sell any.

market determines the price, not the mfgr.

As to one raising the price, others DONT follow price increases. And they do follow price drops. Pretty simple. If I can go across the street and get the same widget, Im going to do so.

As to the ipod thing, every retailer gets the same price from apple on the ipods. And my magic little computer says theres almost zero profit at the current prices. The pod makes the retailer nothing, hence the inflated price of accessories.
 
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