Klarinet Archive - Posting 000038.txt from 2006/08

From: "Kevin Fay" <kevin.fay.home@-----.net>
Subj: RE: [kl] Buffet Pricefixing??
Date: Tue, 01 Aug 2006 23:13:29 -0400

Tim Roberts posted:

<<<Saying that it is not price fixing does not make it so. The United
States, at least, has a rather extensive and complicated set of trade
regulations covering these kinds of situations. The simple act of
having two competitors gather in a room and discuss pricing is a
potential violation of those trade regulations.>>>

to which Kevin Fay (i.e., me) replied:

<<<Tim has unknowingly hit on the difference between price fixing (illegal
under Section 1 of the Sherman Act) and "resale price maintenance" - which
is quite legal as long as the manufacturer acts unilaterally, as Buffet
appears to have done here.>>>

. . . but then (ACK!) I neglected to explain the difference. Ack, the
cocktail prepared by my lovely bride hath worked too well.

"Price fixing" is when two *competitors* agree to set a price. This would
happen if Conn-Selmer, Yamaha and Buffet decided that no one would sell a
clarinet under $X. They would all go to jail.

Here, Buffet didn't "agree" with anyone. They acted unilaterally, imposing
the condition on all dealers. The dealers are free to comply, or no longer
sell Buffets.

There are very confusing cases where resale price maintenance has been found
illegal because there was an "agreement" between the manufacturer and a
dealer or group of dealers - but those cases may no longer be good law
(i.e., binding precedent). They don't make much sense to me, but I have not
studied in depth.

kjf

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