Originally Posted by Darth Lefty;21800203[b
]MAP absolutely is price fixing. If it weren't, different retailers would have different prices depending what margin they wanted to run, or to blow out overstock or old stock. But they can't for fear of the distributor cutting them off. What other merit or metric am I supposed to use to choose between these retailers? They are not permitted to compete. They are paralyzed.
Originally Posted by
Darth Lefty
But prohibited from showing that price for fear of retaliation?
I understand that it's legal.
You have answered your own question: in the United States, price-fixing is illegal; since there have been court cases about MAP pricing, and it has not been deemed illegal, it is not considered price-fixing. You can assert something to the contrary, but that does not make it true. The supreme court, the justice department, and the federal trade commission all disagree with you.
I pointed out the key factor in an earlier post: price-fixing occurs
horizontally –- meaning it is an agreement among firms at the same stage of the production and distribution process, such as between manufacturers or between retailers. MAP pricing, on the other hand, is entirely vertical: it is a manufacturer imposing a minimum advertised price on the entity in the next step of the chain - the retailer. Such vertical agreements are not considered “price-fixing.“ (Note that this would still allow different manufacturers to set different MAP prices and hence still compete with each other. So, your assertion that MAP pricing eliminates competition is just incorrect.)
Let me work with your own example: A Cane Creek headset. If CC colluded with Chris King to coordinate prices - probably to jack them up, but at minimum perhaps just an agreement to not undercut each other - that would be price fixing. They are horizontally-related in the market, which means they are competitors. When CC enforces MAP pricing with its retailers, that is entirely vertical, and not price fixing. After all, Chris King could still sell headsets at lower prices, even if they, too, use MAP.
Following is a snippet from a Federal Trade Commission
site on the subject… Note that this is one of the federal agencies charged with enforcing anti-trust law, along with the anti-trust division of the Justice Department – which views it the same way:
If a manufacturer, on its own, adopts a policy regarding a desired level of prices, the law allows the manufacturer to deal only with retailers who agree to that policy. A manufacturer also may stop dealing with a retailer that does not follow its resale price policy. That is, a manufacturer can implement a dealer policy on a "take it or leave it" basis.