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August 26, 2008

Minimum prices, minimum discounts?

Consumerworld tipped us off to a Wall Street Journal story about a Supreme Court ruling last year that allows manufacturers to set minimum prices for their products, and to require retailers to honor those prices.

According to the article, companies in the same industry can't collude with each other to set prices --- that would violate antitrust laws --- but a business could stop working with a retailer who did not abide by those policies.

Some companies allow stores to sell products for less as long as they don't publicize those lower prices. It's kind of the way that scratch'n'dent or salvage grocers work --- they often make agreements with their suppliers not to undermine sales at traditional markets and drug stores by advertising how low their prices are.

But that kind of policy presents a challenge to online retailers, the WSJ article points out, because by their nature they alert consumers to prices in the market.

Posted by Liz Kay at 2:10 PM | | Comments (0)
Categories: Cheap/Frugal, Consumer protection, Shopping
        

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