Interesting potential development on MAP's

[DonK]

Since the legality of manufacturer's "minimum advertised prices" (MAP's) come up a lot around here, I though some might be interested that the issue is currently before the U.S. Supreme Court:

 

http://online.wsj.com/article/SB117493307547749274.html?mod=home_whats_news_us

[denvertrakker]

I've been wondering for years how long it would take for this to come around again, and make to the high court.

Those of us with too many years under our belts will remember the days of "Fair Trade" which was intended to accomplish the same thing as "MAP". Fair Trade was ruled illegal and abolished in the '70s after many legal battles, and MAP arose to accomplish more-or-less the same thing, but legally....or maybe I should say more legally.

I lived in the DC area most of my life, which was a great oasis for "hi fi" buyers, because there was no fair trade in the District of Columbia. For some odd reason (maybe because it wasn't a state) the law didn't apply there. So loads of "mail order" audio suppliers located in DC (sometimes just barely over the line from Maryland) to sell audio at discounted prices.

With the rise of big-box retailers it'll be interesting to see what happens at WalMart and Best Buy if this gets toppled....not to mention GC & MF!

[DonK]

 

I've been wondering for years how long it would take for this to come around again, and make to the high court. Those of us with too many years under our belts will remember the days of "Fair Trade" which was intended to accomplish the same thing as "MAP". Fair Trade was ruled illegal and abolished in the '70s after many legal battles, and MAP arose to accomplish more-or-less the same thing, but legally....or maybe I should say more legally. I lived in the DC area most of my life, which was a great oasis for "hi fi" buyers, because there was no fair trade in the District of Columbia. For some odd reason (maybe because it wasn't a state) the law didn't apply there. So loads of "mail order" audio suppliers located in DC (sometimes just barely over the line from Maryland) to sell audio at discounted prices. With the rise of big-box retailers it'll be interesting to see what happens at WalMart and Best Buy if this gets toppled....not to mention GC & MF!

 

 

I've lived in the D.C. suburbs almost entire life, N.Va. until 10 years ago, and now Maryland. I remember well the hi-fi oasis days (remember Atlantis Sound).

 

BTW, what many people don't realize is that while it's currently per se illegal for manufacturers to enter into distribution agreements that specify a MAP (whether it SHOULD be per se illegal is the subject of the current court case, i.e., as opposed to a rule of reason standard), they can unilaterally impose MAP's at will. They just can't enter into an agreement with a retailer to require one. Sounds like a semantic distinction, and it is to some extent (but not wholly), but the reason is that the anti-trust laws bar entering in to contracts with the intent to fix prices or diminish competition, while the right of individuals to act unilaterally is preserved. So if I'm, say, Taylor, I can sell my guitars to any retailer I want and impose a MAP on them, and automatically drop them as a dealer if they don't comply. What I can't do is sign an agreement with them, one condition of which is they agree to sell at MAP.

[denvertrakker]

I've lived in the D.C. suburbs almost entire life, N.Va. until 10 years ago, and now Maryland. I remember well the hi-fi oasis days (remember Atlantis Sound).

 

 

I actually worked for Custom HiFi and its mail-order partner, Dixie HiFi, in the early '70s...which morphed into....tadaaa! Circuit City!

 

 

BTW, what many people don't realize is that while it's currently per se illegal for manufacturers to enter into distribution agreements that specify a MAP (whether it SHOULD be per se illegal is the subject of the current court case, i.e., as opposed to a rule of reason standard), they can unilaterally impose MAP's at will. They just can't enter into an agreement with a retailer to require one. Sounds like a semantic distinction, and it is to some extent (but not wholly), but the reason is that the anti-trust laws bar entering in to contracts with the intent to fix prices or diminish competition, while the right of individuals to act unilaterally is preserved. So if I'm, say, Taylor, I can sell my guitars to any retailer I want and impose a MAP on them, and automatically drop them as a dealer if they don't comply. What I can't do is sign an agreement with them, one condition of which is they agree to sell at MAP.

 

 

The Manufacturer's Agreements I've read all seem to have variations on the following:

 

"You are free to sell our product for whatever you choose. However, if you advertise our product below MAP, we are free to discontinue selling to you." Like you said, semantics, but it's held up for..what..20 years? Can't wait to see what happens...