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In Reply to: Price-fixing or MSRP, what's the difference? posted by Jay on March 25, 2007 at 12:41:25:
Hi-Antitrust law is full of distinctions that may strike a common-sense-based layperson as theoretical, theological, Jesuitical, or stoopid. But that's they way it is.
Repeat after me: "Price fixing is not illegal. Conspiracies to fix prices are."
Now, deciding which category a specific act falls into is what all the shouting is about. And, as a general rule, journalistic accounts of legal proceedings are dumbed down, or start dumb and get worse.
I have previously posted a web link to FTC guidance that states that a refusal to deal, based on previous discounting, is legal. If I start a loudspeaker company, and __unilaterally__ inform all potential dealers that they cannot discount more than 5%, and __do not__ solicit their agreement, the current state of the law is that there is no conspiracy and therefore no violation. Whereas a normal person would plainly see that the same result has been reached. If I learn that a dealer has sold a pair at dollars above cost, I refuse to fill his next order, and that is that. A unilateral refusal to deal in support of a non-consensual unilateral price support policy is legal, so legal that even the FTC has to admit it on their web site.
Given this background, the statement above that MSRP is part of the franchise agreement is technically wrong. There may be such contracts, but they are not Kosher under most guidance and reported cases.
I am not familiar with the facts of this case, but the usual pattern is that someone lost patience with the Jesuitical fandango and either had their customers sign a contract making RPM (resale price maintenance) a contractual obligation, or in some other way solicited agreement.
There is nothing sacrosanct about MAP (minimum advertised price) agreements. A court that wanted to take a left turn (e.g., the 9th Circuit) could bar them as instrumentalities of conspiracy. Not likely, but it's not as though these things were spelled out nearly 100 years ago in the Clayton Act and the Sherman Act. It's a layer of judge-made fudge over a mountain of bureaucrat-made fudge.
I thought that CJ Roberts' recent quizzing of a lawyer in the Bong Hits 4 Jesus case was absolutely perfect. He established that the school principal had taken a course that covered the three leading cases, and so he said words to the effect that of course, she knew exactly what she could and couldn't do, just as do we--and the transcript then says "laughter."
I hope that when this case is argued, the CJ similarly makes fun of 80 years of Jesuitical antitrust lawyers' assaults on common sense.
Cheerio,
JM
Follow Ups:
Good post, except that it's not kosher to capitalize "kosher".
Jesuitical here.
- This signature is two channel only -
Price fixing can be illegal w/out a conspiracy- vertical price fixing used to be per se illegal, now can occasionally be legal but more often not is illegal, even w/out a conspiracy. I wouldn't rely on the FTC wwwsite for any legal advice, or on the above post. Also, don't know what the "Jesuitical" deal is- Jebbies have educated many a fine young man and work in many impoverished areas of the world where few will venture.
Your post confuses me somewhat.Unilateral refusals to deal in furtherance of a unilateral price support regime (with the qualification that there must be more to it than that, which I did not feel worth getting into) are legal, period.
I therefore don't understand what you mean about price fixing being illegal in the absence of a conspiracy.
If what you meant was the absence of a horizontal component to the price support regime, which apparently was the case in the appeal before the court today, I still don't understand what you mean.
In the case argued today, apparently there were several breaches of RPM by several retailers, and the manufacturer went beyond unilaterality and obtained the explicit agreement of all but one retailer to stop discounting. Obtaining those agreements, even if they were involuntary, is what constituted conspiratorial behavior.
Given the huge number of market entrants in handbags and stereos, I think analyzing such agreements under the Rule of Reason makes sense.
As far as taking legal advice from the FTC site, the site is an official pronouncement of the enforcement body. I know that you can't estop the sovereign in the performance of a soverign act, but it must count for something.
As far as taking legal advice from me, I was not asking anyone to. But, just for the record, I earned a JD at Vanderbilt. One of my antitrust teachers was appointed to the FTC by President Reagan. I three times contributed to peer-reviewed publications of the American Law Institute in connection with the ALI's annual antitrust conference at Harvard. And I have in my files some samples of unilateral RPM documents from high-end audio companies. Not prepared by me. And they look OK to me under the FTC guidance.
As far as "Jesuitical" goes, a "Jesuitical distinction" is a US legal catch phrase for a formal distinction that fails to address the underlying reality.
My guess: Alito, Roberts, Thomas, and Scalia in favor of Rule of Reason.
Ginsburg and Breyer in favor of Per Se. The others up for grabs.
I guess 5-4 in favor of Rule of Reason, but if it were 5-4 in favor of Per Se, life goes on.
a
I don't practice law, but I thought the whole point was that when there was some disagreement, one would prove his/her points by making cogent arguments. Not just by saying things like "it is so obvious you are wrong". DO Judges accept that kind of reason?Certainly you have many many arguments you can trod out for us?
Especially if it is so obvious why he got it wrong.
Or is it OK for someone to complain about a religous slur and then commit his own slur?
sorry, don't have time & it's quite complex. But any agency's wwwsite is going to say what they "want" the law to be, not what the case law says, or what a judge would say it is. It would be consistent with what they say in their briefs (which are very one-sided). Would you aks the IRS for tax advice in an unsettled area? I sure hope not.
By the way, you seem to be down on the Jesuits. What did they ever do to you?...
I know as much about basketball as I do about law, but our daughter's a GU alum (SFS '02) and I am pleased as hell that GU's roundball team is still in the hunt!Hoya Saxa!
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