I think Amazons latest attempt to win public opinion was a bit silly, but I have been meaning to comment that, in most sales contexts, it is the retailer, not the manufacturer, who sets the price offered to the consumer. Manufacturers do name MSRPs, but many retailers disregard these as inconsistent with their business models -- i.e., if your middle name is Discount, you dont want to be caught selling at MSRP. Until about ten years ago, price maintenance agreements (where manufacturer and retailer contracted that retailer would not sell below MSRP) were regarded as per se violations of Section One of the Sherman Act. Nowadays theyre analyzed under the so-called rule of reason (where its very difficult to prove sufficient harm to find a restraint of trade), but I think the general principle still holds. No one can force Hachette or anyone else to do business with a particular retailer, but of course that works both ways: Amazon doesnt have to do business with Hachette either. What makes this problematic is Amazons ever-increasing market power in the book retail industry. Problem is, the courts nowadays are disinclined to be concerned about intra-brand competition so long as inter-brand competition is still there, so that huge market power by a retailer probably wont be viewed as a problem except in the most extreme cases.
Posted on: Sun, 10 Aug 2014 15:58:59 +0000
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