eBay, Costco Trying to Reverse Supreme Court’s MAP Ruling

[Richard King]

http://www.cepro.com/article/ebay_costco_trying_to_reverse_supreme_courts_map_r uling?utm_source=CEPWeekly&utm_medium=email
Although ruled legal by the Supreme Court, discounters are trying to get minimum advertised prices overturned

Major retailers like Costco and eBay are reportedly trying to overturn a ruling that allows manufacturers to set minimum advertised prices (MAPs).

According to an article in the Wall St. Journal this week, these powerhouse discounters believe MAP enforcement is anti-consumer. The article says that lawsuits already abound from several online resellers against manufacturers who are trying to enforce MAPs.

The Supreme Court ruled MAPs to be legal in June 2007, but eBay and other retailers are convening in Washington to develop a strategy to overturn the ruling, according to the article.I wish them luck

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[tcusta00]

Cool! I was vaguely aware that MAPs existed but I didn't know the extent to which they are enforced... good luck Costco et al!

[Stuart Sweet]

I think there needs to be a middle ground between MAPs and price dumping... and I'm confident that the courts can find one.

[tcusta00]

I think there needs to be a middle ground between MAPs and price dumping... and I'm confident that the courts can find one.

I'm curious why you think price dumping is bad. If the retailer wants to create a loss leader out of a product then that's their right. If the manufacturer doesn't want to sell to that retailer anymore than that's their right, too. Why create a silly law out of it?

[LarryFlowers]

This issue dates way back... one of the biggest violators has always been Mistsubishi, who would tell retailers what there regular price and sale prices were to be. If the retailer violated the pricing Mitsubishi would stop shipping. They were sued constantly and always lost, but they kept right on doing it.

I admit to confusion on this issue. I am not sure that a manufacturer should be allowed to set prices other than the price a dealer pays them for the goods. What they sell it for after the fact should be left up to them and selling goods too low would seem to be self correcting in the long run.

[Sirshagg]

I'm curious why you think price dumping is bad. If the retailer wants to create a loss leader out of a product then that's their right. If the manufacturer doesn't want to sell to that retailer anymore than that's their right, too. Why create a silly law out of it?

Exactly!

[rudeney]

Many retailers get around this by putting the MAP in print, but then stating "before $X discount" in the fine print. It can be confusing because the same page may have other items with a printed price that's labeled "after $X off". Personally, I'd like to see MAP's done away with.

In Costco's case, I can tell you that they have strict guidelines as to pricing; I believe they will not sell any item with more than a 7% markup. They are glad to tell manufacturer's that they won't sell there products if their retail price requirements are too high. And those manufacturer's better listen - i was at Costco at lunch to day and it was PACKED! I usually avoid it on Saturdays, but two weeks ago I went there anyhow and I literally could not find a parking space, and the lot there is huge.

[Richard King]

Many years ago manufacturers could not only set a "Minimum Advertised Price", but also the price at which a product could be sold. They called it "Fair Trade Laws". When I was in the consumer audio business in the early '70's Teac was one of the biggest proponents of "Fair Trade Laws" and no Teac product could be sold below the price that they set. Sometime in the mid/late '70's Fair Trade Laws were abolished, but, by then there were few companies setting their "Fair Trade Price". Of course, companies like Best Buy probably like MAP since, for some reason, people feel that they get good prices at BB, even though the same or better pricing can be found in most other stores.

http://en.wikipedia.org/wiki/Fair_trade_laws