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Possible economic motive behind McIntosh's stance (long)

I am not writing to defend McIntosh, but to offer the likely economic rationale for their stance. I have considerable experience in antitrust economics, which motivates my analysis.

If McIntosh is like most high end audio manufacturers, then they have exclusive territory arrangements with their retailers. Retailers "agree" not to set prices below an agreed level and not to sell McIntosh products across territories. (This is a potential antitrust violation.) This keeps dealers happy by assuring them of high margins, and keeps McIntosh happy because dealers push its products. To maintain this arrangment, McIntosh must vigorously enforce each dealer's policies. This includes preventing a dealer in one region from selling new equipment at a discount in another, for example via Audiogon or eBay.

A devious dealer could do the following to circumvent McIntosh. "Sell" a unit to a "friend" at 30% below list. That "friend" then turns around and sells the unit on eBay at 30% below list. (In fact, the dealer sells the unit himself, but under a different name. In this way, the dealer undercuts other dealers without arousing McIntosh's suspicions.) There are enough greedy dealers out there for McIntosh to worry about this. One tool that McIntosh has to limit the demand for such quasi-new products is the voiding of the warrantee.

By policing even innocent auctions, McIntosh prevents them from becoming widespread. This bolsters the exclusive territory deals, and keeps the dealers happy. As for consumers, I wonder if McIntosh has underestimated just how much bad will they would generate. They might regret having been quite so zealous in defending their practices.

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