Price Fixing Faces Tough Opposition in Washington D.C.

BabyAge.com President Jacob Weiss

For those of you unable to follow my live Twitter feed from the press conference yesterday morning (granted, for those of you on the West coast I started at 5am), I attempted to capture a lot of the sentiment coming out of an event featuring retailers, consumer advocates and government representatives who promised a hearing in the New Year and a re-introduced, two-page bill to ban RPM or “price-fixing.” This would overturn the Leegin Supreme Court decision of 2007 (see my previous post for background).

Those in favor or RPM – like The National Association of Manufacturers for example – say it prevents deep discounters from hurting brands’ prestige or perceived quality. Instead of “price-fixing” they see it as brand management. But according to American Antitrust President, Bert Foer, this is missing the big picture. “The Supreme Court underplayed the magnitude of the anticompetitive risks of price-fixing. The Court did not account for the fact that it leads to higher prices, reduced efficiency and lost innovation in retailing. They failed to recognize how those risks have grown with increasing retail concentration.”

The panel of policymakers and retail advocates including eBay’s VP of global government relations, Tod Cohen (pictured above), and Federal Trade Commission (FTC) Commissioner Pamela Jones Harbour, offered a number of different courses of action to address the impact of RPM / price fixing including definitive government action and support. Harbour also announced that starting early next year, the FTC will hold a series of workshops educating people on best practices of RPM.

It was a good discussion that saw a number of representatives sharing their views and expressing a desire to work toward a common goal. BabyAge.com President Jacob Weiss shared pricing examples showing that prices rose 20 to 40 percent after the Leegin decision on several popular products from car seats to backpack child carriers. Weiss provided screenshots showing the same $60 price for Elmo Live toys from ToysRUs.com, Walmart.com, Amazon.com and Target.com.

Audio
• You can listen to NPR’s coverage of the event yesterday by clicking HERE.

• Full audio of the press conference is now available HERE.

Images
• Some photos from the event can be found on eBay’s Government Relations’ new Flickr feed.

Related Information
• You can learn more about eBay’s stance on price-fixing HERE.

• To see the majority of the media stories covering this topic, and to find out more about how you can get involved, check out protectconsumerchoice.org.

Cheers,
RBH

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(6) Comments

6 Responses on this post. Click to add yours.

BobOn December 6, 2008 at 7:26 am Said:

When manufacturers set MAP prices, it allows small business to compete with huge corporations like Walmart and gives small business a chance to compete on fields other than pricing such as customer service. Small business is good for the economy.

When there is no MAP, people sell the products for right at or below cost, which devalues the product.

Ebay makes another bad decision by siding against MAP pricing. This is why manufacturers do not like their products being sold on ebay. Ebay and these big box retailers thinks everything is about low prices but it’s not.

When ebay gets a clue perhaps it will quit losing all of its market share to competitors. Manufacturers have a right to protect their brand from becoming another cheap peddled ebay object.

It is not at all anti-competitive so long as the manufacturer enforces the MAP price among all retailers. The only thing that is anti-competitve is when a company like Walmart sells these products for 20% below the cost that a small business pays its own wholesaler.

Wake up!

Bob
Small Business Owner that supports MAP pricing

Tom "a consumer"On December 6, 2008 at 1:35 pm Said:

It is unfortunate that MSRP represents an “iron curtain” that our retailers are forced to circumvent by offering “store discount cards” and “check price in basket”. The MSRP means that some items willl be “dogs” and not be sold. In this economy who can afford them. Many people for years have been wary of brand “x” as being “good” but pricey. A similar product from brand “Y” is less expensive and oft times of similar or better quality. But brand “Y” is a manufacturer with a limited “stable” of products. Does he “Y” benefit from an artificial ground floor for a product? Well he can MSRP less than Brand “X” and hope discerning shoppers will realize that the consumers cost benefit is better with Brand “Y” the “off-brand”, than with the inflated price of Brand X.

In the current economy, some consumers have no choice.

Let Brand X stop paying super salaries and benefits to management. Let Brand X allow free trade competition. Let Brand X stop labeling “Made in America” with foriegn and domestic parts. If it is an American product, then it is a real American product.

The past years of competition have destroyed the american manufacturers and destroyed this nations ability to be an industrial power. It started with our Maritime industries and we can see the auto industry today. WE can no longer provide the industrial base for our own survival. At a time when more and more “jobs” are outsourced, we expect our unemployed to buy at MSRP.

Perhaps these manufacturers don’t mind killing the “goose that laid the golden egg” as long as they get the “pate de foie gras” or Kobi beef.

Be nice if they would share hamburger with the rest of us!

HenriettaOn December 7, 2008 at 4:22 pm Said:

I don’t think I have a problem with manufacturers setting a minimum price. If I do not want to comply with their policies I have the freedom to not deal with them.

Where I have a problem is with eBay using the automated VERO system to take down listings paid for by their customers the sellers, at the bidding of manufacturers.

The VERO system was designed to protect intellectual rights in compliance with the Digital Millennium Copyright Act of 1998. Price fixing has nothing to do with intellectual rights.

If I go to a remainder store and buy one of the Purple Doohickey Company’s products there, what I choose to do with it thereafter is MY BUSINESS and protected by law. If I have bought it for resale and then list it on eBay only to have the listing ended under VERO by the Purple Doohickey Co., my rights have been violated and eBay is participating in a violation of my rights.

Go ahead and fight this battle on my behalf eBay, get lots of lovely publicity which will impress a few who do not understand the issue. I will even write letters to my representative.

Meanwhile back at the venue ….. nope not for me.

PAROn December 9, 2008 at 11:34 pm Said:

@Henrietta – I wouldn’t worry about it. Ebay should have thought about it before making that youtube. I hear its already angered many small sellers who are willing to write to Washington and set the story straight. This whole thing may be set to backfire. Will be fun to sit back and watch…

MySpace CommentsOn December 10, 2008 at 1:29 pm Said:

I dont have problem with producer price. This is insane.

GailOn December 14, 2008 at 4:17 pm Said:

Gee, isn’t it odd that all but five posts have disappeared…….

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