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Price Fixing Could Cost Consumers up to $300 Billion Annually
Resale Price Maintenance Could Bankrupt RetailersA Supreme Court ruling in 2007 has paved the way for price fixing among manufacturers. In what amounts to legalized antiturst, the law now enables manufacturers to set minimum prices for their products which retailers must adhere to, or risk losing the manufacturer as a supplier.
Recently, retailers have begun to complain publicly about the practice. One such retailer, Jacob Weiss of BabyAge.com, which specializes in children's gear and maternity clothing, has said that of their 465 suppliers, nearly 100 of them dictate the minimum price they can charge on their goods. The owner has said that this practice could put him out of business. Consequently, BabyAge is suing approximately half a dozen suppliers alleging price collusion.
The consumer doesn't benefit from this practice either. Supreme Court Justice Stephen Breyer estimated in his dissent in the case, that 'resale price maintenance' as it is also known, could cost consumers an additional $300 billion annually.
Industries reportedly most affected include baby products, pet food, home furnishings and consumer electronics.
AUG-19-08: Price-Fixing Makes Comeback After Supreme Court Ruling [WALL STREET JOURNAL: ANTITRUST PRICE FIXING]
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Published on Aug-19-08
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