SCOTUS ok's price fixing. (Repeal of sections of Sherman anti-trust act)

[Nikki Stone1]

http://www.nytimes.com/2007/06/29/business/28cnd-bizcourt.html?_r=1&hp&oref=slogin

June 29, 2007
Justices End 96-Year-Old Ban on Price Floors

By STEPHEN LABATON
WASHINGTON, June 28 — Striking down an antitrust rule nearly a century old, the Supreme Court ruled today that it is no longer automatically unlawful for manufacturers and distributors to agree on setting minimum retail prices.

The decision will give producers significantly more leeway, though not unlimited power, to dictate retail prices and to restrict the flexibility of discounters.

Five justices said the new rule could, in some instances, lead to more competition and better service. But four dissenting justices agreed with the submission of 37 states and consumer groups that the abandonment of the old rule would lead to significantly higher prices and less competition for consumer and other goods.

The court struck down the 96-year-old rule that resale price maintenance agreements were an automatic, or per se, violation of the Sherman Antitrust Act. In its place, the court instructed judges considering such agreements for possible antitrust violations to apply a case-by-case approach, known as a “rule of reason,” to assess their impact on competition.

The decision was the latest in a string of opinions this term to overturn Supreme Court precedents. It marked the latest in a line of Supreme Court victories for big businesses and antitrust defendants. And it was the latest of the court’s antitrust decisions in recent years to reject rules that had prohibited various marketing agreements between companies.....

[OrangeCountyDemocrat]

1. 5-4

This country is Screwed.

[spotbird]

2. Jesus, it doesn't end

The Democratic powder is still dry, thank God.

[Individualist]

5. And it will only get worse.

[hatrack]

6. And that's the main thing!!

:puke:

[Richard Steele]

44. We're on a downhill slope and accelerating rapidly. These people hate America, and...

...are doing everything they can to tear it apart, piece by piece.

[sinkingfeeling]

3. Can you believe this? The corporations really got their money's worth in having a GOP

Congress install this court.

[Nikki Stone1]

4. Yes, with their corporate activist judges

What a mess for the people.

[thoughtanarchist]

7. Ohhh I think I'm gonna

:puke:

[Double T]

8. corporate monopolies and price fixing are OK. What next?

corporate fraud, conspiracy and extortion will be OK? The US of A is becoming stranger each day.

[blondeatlast]

9. They are so damn obvious--and they don't even care.

Why don't they just overturn the Constitution, set up their "Mission Accomplished" banner, and be done with it?

Spare us the pin at least...

[Nikki Stone1]

10. It's not even necessary. Just leave the facade for PR purposes

.....

[dragonlady]

11. This may finally reach the consciousness of some people

The ones who don't care about the war or habeas corpus or wiretapping. When they go to Wal-Mart and find out that they don't get the brand name goods for less anymore, maybe they'll get concerned. (Dragongentleman says Wal-Mart will just switch over to all generic Chinese knockoff products, no brand name manufacturers.)

[ljm2002]

12. Remember the answers they gave...

...when being confirmed, concerning their respect for the "stare decisis" doctrine (precedent). Yet they've been knocking over precedents like bowling pins. I'd say it's already getting close to grounds for impeachment, based on lies they told at the confirmation hearings.

Sadly, we won't be able to get any mileage out of the term "judicial activism" because the term is owned by the right wing, and only seems to apply to centrist or vaguely leftist decisions. Yet that is exactly what we are dealing with.

As many have said: if you want to know what the rabid right is really up to, just listen to what they say, assume the exact opposite, and you won't ever go far wrong.

(edited to add comments about judicial activism)

[Nikki Stone1]

14. Yep. They lied about their intentions at the hearings

We are so screwed. (Or since it's right wing activist judges, "screwn")

100 years of precedent out the window in one day.

[mikelgb]

25. I believe stare decisis has been rendered quaint n/t

[nradisic]

13. The answer is Impeach

Impeach them all; judges, Gonzalez, Bush, Cheney. Our forefathers whote it into the constitution. When all else fails, throw the bums out. It can be done one by one or wholesale. Wholesale Impeachment...

[Nikki Stone1]

15. Starting where? Alito?

?

[ooglymoogly]

22. Charge this faker and his cabal of stealing the election amongst all the other treasons with the

collusion of SCOTUS and the corporate press and run them all up the criminal flagpole under RICO statutes. Pour bleach on the lot of them to quell the stench. If convicted wouldn't that make all his appointments null and void equally culpable.

[NewJeffCT]

16. Not just victories for big business

These are catastrophes for the little guy.

[Bitwit1234]

17. bush got the supreme court he wanted.

Everything in this country that benefits regular America will be junked and everything will be made in favor of the corporations and the republican view.

[me b zola]

18. I am past anger (at least for the moment)

I am heartbroken. We are witnessing the destruction of our nation piece by piece.

Okay, anger is back. I'm mad as hell.

[ThomCat]

19. We're going to start seeing every greedy corporation start

taking everything to court, and push everything up to the supreme court in order to get every rule and every regulation overturned.

The current majority won't be happy until they have given corporations keys to our treasury and turned all of us into indentured sources of labor and revenue.
x(

[ooglymoogly]

20. Um, * shco has already given the treasury away

aint nuthin left. Corporate welfare doncha know. Now they are getting a theft license to squeeze any last coins out of "we the people".

[The Doctor.]

21. The RW F#^%tards will say this was a 'great ruling for the economy'

and point to the Dow as corporations rake in more record profits.

Most of the country is so stupid they don't recognize that most of those profits are garnered by gouging the entire middle class into insolvency.

God I hate American Idiots.

[tom_paine]

23. It is neither Supreme nor a Court. Not even close

It is a corrupt cabal of 5 Right-Wing Junta Members.

It is a criminal organization (at least the dominant part of it) that owes no allegience to the Rule of Law. None whatsoever.

And it shows.

Only the Declaration of Independence is left us. That is the ONLY thing the Founding father bequeathed us that we have left.

We are Imperial Subjects in a "gentle" Tyranny (and how long will it remain gentle? how long before it travels the same path every other Tyranny has? I would guess no more than 30 years and probably a lot less).

We cannot even polish the boots of the citizens of the few free nations left in the world.

[ooglymoogly]

36. Amen soldier...we must fight all the harder

[dansolo]

24. So much for Stare decisis

Didn't one or both of Roberts and Alito say that they would honor SC precedent?

[northzax]

26. and you know who hates this decision more than anyone else?

WalMart. oh yes, WalMart. because now a company can simply say "no, you cannot sell our DVD player for less than the local electronics store can. No, you may not use our products as a loss leader.

you know why you can't buy an iPod at WalMart? (except at just a few of them) because Apple won't ship to places that sell for less than the MSRP. Apple, of course, has had the power to be able to do this, allowing the giants to only discount a little off of MSRP, not a ton. this is good for local retail, folks.

[datasuspect]

27. why would a vendor

broker worse deals for walmart (dealing in volume) to placate smaller retailers (who they can soak for more juice)?

this gives walmart tremendous leverage, they can still get their same deals, the smaller outfits will have to fight tooth and nail to not pay higher prices (because now there doesn't have to be any equilibrium).

bad, bad, and bad.

[northzax]

28. because if you have different MSRPs for different retailers

then you are into Sherman violations, that anti-competitive behaviour. All this does is return pricing decisions to manufacturers, rather than retailers.

how does this increase WalMart's leverage? if a widget cannot be sold for less than $1 retail, then WalMart may make more on each widget, with volume pricing, but they cannot undercut Bob's Widgets down on Main Street. Of course, this works if the Widget maker wants a minimum price. But if they do want a minimum price, then Wal Mart can't sell widgets for 50 cents until Bob's goes out of business.

[hiphopnation]

29. i see the logic

and i'm reeeeally slow when it comes to economics (my eyes glaze over when I see numbers) but from what I gleaned from the article, particularly Breyer's disent, was the mess it will create as judges have to rule on these cases on a case-by-case basis, and, of course, the concern that it will raise consumer prices. Just what the middle and lower classes need right now. :shrug:

edit: spelling

[northzax]

33. yes, there could be messy litigation for a while

but most of it will be sorted out in time by the courts (I would really like Congress to step in at this point and state that price floors must be uniform, if they are used by the manufactuerer.

I actually don't think, in point of fact, that this will raise prices on much beyond luxury goods and large, branded, manufacturers who can afford to resist the large retailers. After all, if WalMart doesn't want to deal with the price ceiling, they can simply refuse to carry that brand, shutting the manufacturer out from the largest retail environment in the world. only really well branded goods, that can ensure themselves a retail outlets, can afford to annoy retailers by insisting on prices and eliminating their chances to undercut the competition.

a couple of examples that might help the consideration:

1: Nike makes the Air LeBron SVI and insists on a retail price of no less than $150. Footlocker can no longer sell them for $130 simply based on volume, and WalMart can't sell tehm for $130 as a loss leader to get you in the door. All of a sudden, all the places that retail Nikes are on the same footing, if you aren't going to save $20 by going to the chain, you find the place that is convenient, or that has nice clerks, or a good paint job, whatever. Still, Footlocker isn't NOT going to carry the new Nike, right? too much cachet.

2: Sony makes a new 42" flatpanel TV, and puts a floor of $1500 on it. used to be, circuit city would sell it for $1300, now they have to keep the same minimum prices as the locally owned place with the clerks who actually know what they are talking about. but Circuit City knows they will sell a bunch, so they will still carry the TV, cause Sonys sell themselves. if they can't sell them without discounting, they'll stop buying them from Sony, right?

3: a new company decides to start making flat screen TVs. they put a floor of $1500 on them, just like the sonys. but no one has ever heard of them, so WalMart and Circuit City refuse to carry them at that price. the Company lowers it's price, or removes the floor totally.

4: a publisher decides to not allow discounting on the new Stephen King novel. Barnes and Noble, Amazon and Borders refuse to carry the book without being able to discount it, since that is their business model. the company relents.

seriously, if things were the same price at the megastore as your local store, or even a lot closer in price, you might be able to support the local store, and keep the money in the community, right? not saying this is how it will end up working, but it seems reasonable that with a bit of oversight and a simple act of Congress it could be made to work. Discounting has helped a lot of people buy a lot more stuff, but it has decimated thousands of small towns and gutted small to mid level retailers across the country. given the anger on this board towards WalMart, you'd think this wouldn't upset people as much, since this is how WalMart became WalMart.

[Nikki Stone1]

37. This is certainly one way to look at it, but it assumes alot

Time will tell, I suppose

[TorchTheWitch]

42. frankly, I'm more concerned that this still costs me more

1. Those Nikes you mentioned that I used to be able to get for $130 at a discount store I'll have to pay $150 for or do without.

2. That Sony TV I could have gotten for $1300 I'll now have to pay $1500 for or do without.

3. I'll have to buy that new company's TV at the $1300 I used to be able to get the Sony for and it will not only probably be an inferior product but the new company will most likely go belly-up, so I can't get them to replace or fix their inferior product when it breaks down later.

4. Or more than likely the company doesn't relent and either the big book retailers won't be able to discount it (and let's face it, they aren't going to not carry the latest King book since they know that's a draw they need to get people into the store/on the website), or they negotiate and discount it at 10% instead of the 25% they used to be able to do... bottom line is I'm paying more for that book or have to do without.

In all your scenarios I either have to spend more for all this stuff that I didn't used to have to spend, or spend the same that I used to for an inferior/undependable/no-name product, or do without. I can probably do without the Nikes, the TV and the books, but I can't do without clothes, food, medications/healthcare products, auto parts, fuel, and all the other necessities of life. Face it, this SUCKS for the average person.

And how will this effect consumer services? Will not only products go up in price, but also services since (if?) those products needed by a service provider in order to perform a service will go up in price? If so, that higher price will get passed on to the consumer of the service... it's not like service providers are going to just eat the difference!

[Nikki Stone1]

34. I had actually thought of that

First time I felt sorry for Wal Mart

[ooglymoogly]

38. Walmart gets a disproportionate share of its products from

China...and can charge cheaper prices for that product no matter what and that will keep Walmart immune. This new fatwa by elimination from SCOTUS should be likened to the laws governing going outside the country escaping drug price fixing to get more realistically priced drugs so drug co's can gouge the people of this country more efficiently....soon the same thing will, if not all ready, happen to all else...Americans will only be able to buy fixed overpriced products in this country (the company store) keeping "we the people poor" and our corporate masters rolling in obscene wealth. Does anyone remember what happened when oil Co's broke this law that has now been taken from us and tried to fix the price of gas? But then we had recourse, now we don't. We are headed in a direct line to feudalism and an Orwellian corporatocracy.

[northzax]

39. eh?

this has nothing in common with what the Supreme Court ruling was about. What are you talking about? This decision did not cover price fixing, it was about minimum pricing from manufacturers, not retailers. Retail price fixing is still covered by Sherman. This says that if you make a widget, you can tell all stores that sell them for you that you don't want them to charge less than $25 per widget. you don't HAVE to, but you can. if they don't agree to your prices, then you can refuse to continue to supply them. if the retailer doesn't think they can make enough money at that price point, because they won't sell enough, they can refuse to carry the item. if enough retailers refuse to carry it, the manufactuer will reduce the price, or drop the minimum price.

it turns the MSRP into a possible Mandatory Retail Price. but it doesn't mean that most manufacturers will actually enforce this (think of yourself as Simon and Schuster. You have a price on every book. you insist that all retailers sell it at that price. All of a sudden, Amaxon, Barnes and Noble, Borders and Books a Million refuse to carry your book, since they can't sell it competitively at that price. are you going to stick to your guns and not use four of the seven largest booksellers in the country to market and sell your book? seems like this would be a poor decision, don't you think?

[tsuki]

40. But some will. One of the products I represent in my showroom

is a small company (Canadian) making a superior product. They rely on the showrooms to push their product. They are not in the box stores.

Someone who buys from them (we don't know who) has a deal with an internet company. The internet company sells at 40% off list. They move a fair amount of product.

So, you would think that the manufacturer would be doing cartwheels. Well, no.

Many showrooms started dropping the product because they could not compete. They moved on.

Now the manufacturer is facing dropping sales. What can they do?

They could close down the vendor. They cannot, against the law. They can tell them they cannot sell at that price. They cannot, against the law. There is nothing they can do, but slowly go bankrupt.

There are other problems that they face with internet sales. Shipping, warranty, customer satisfaction.

I like the company and want them to succeed. But they are between a rock and a hard place.

[northzax]

41. And these are the people this ruling will help

While you cannot control who sells your product all the time, you can now control the pricing, which means they can continue to be in showrooms like yours, with all the customer support that entails. if i were they, not knowing what they make, i would give an msrp, allow for 5% discounting for the first 6 months the store has it, then maybe 10-15% after 6 months. Higher sales, more retail opportunities and diverisified outlets. Everyone is happy (well, except for the people getting the really good deal. Oh well.

[tsuki]

43. They request a max discount of 25% to the public. The funny

thing about this, we get free shipping. So a $2000.00 item is $1500.00 free shipping. Now that energy cost are so high, the internet shop charges $300.00 freight to residential. They discount 40%, so the product cost $1200.00. Where is the savings?

I am beginning to think that the business model of one hundred years ago is no longer valid. :shrug:

[Hubert Flottz]

30. What else would you expect out of a gang of GOP thieves?

Honorable my ass!

[RB TexLa]

31. Many states mandate this by law for retail gasoline. Has to be sold at a min. mark up

[taught_me_patience]

32. Welcome to the United States

where the government is of the Korporation, for the Korporation, by the Korporation

:puke:

[proud patriot]

35. FUCK

x(

[fortyfeetunder]

45. Just reinforces an incentive-- live a simpler life

Buy what I only need, not what I want.
Get out of the "demand" side of consumer goods.