Thursday, June 28, 2007

Price Fixing OK'd by Supreme Court


Marketplace reported on the Supreme Court's decision to overturn a 96 year old ruling to ban "minimum price agreements."

"These are deals between companies that make things and the retailers that sell them. For example, a TV manufacturer tells the electronics store its new TV has to sell for a thousand dollars, not a penny less. The electronics store says, OK."

It turns out that since 1911, it's been deemed illegal for a retailer to agree to a manufacturer's set price, and today's ruling had Justice Stephen Brier comment that it will likely raise the price of retail goods. As a consumer, I had no idea about this because it feels like I constantly see products that have fixed prices like Apple, Mustela, and various baby gear brands. However, it seems that it used to be that pricing agreements between manufacturers and retailers could be challenged on a case-by-case basis. Now, the situation has reversed and the burden of proof is on the distributer, or the discounter.

I can see prices increasing in general, and I can see my precious savings found at my beloved Amazon fizzle away. I'll be looking out for more news on this to see what kind of impact it has on price fixing.