According to a report in today’s Wall Street Journal, Sony and Samsung -- two of the world’s largest television manufacturers -- "have begun trying to force retailers to rein in discounts on televisions, threatening to cut off those who sell TVs for below the manufacturer’s minimum prices."
Sony and Samsung have implemented this new policy to reap higher profits – from the wallets of consumers. The same news story also cited other electronics companies that have "tough policies restricting the prices at which their products can be sold…"
Until a few years ago, that kind of vertical price fixing was against the law. Unfortunately, the Supreme Court narrowly overturned the century-old ban on retail price maintenance in 2007. Since then I've been working to restore it.
As the chairman of the Senate Antitrust, Competition Policy and Consumer Rights panel, I wrote legislation to overturn the court's decision. Justice Breyer, in his dissenting opinion, estimated that if only 10% of manufacturers engage in vertical price fixing, the volume of commerce affected would be $300 billion, costing the average family of four an additional $750 to $1,000 for retail goods every year.
My bill, the “Discount Pricing Consumer Protection Act,” will allow retailers to sell goods below a threshold price set by manufacturers. I’m pleased that it was approved by the Senate Judiciary Committee last November, and I’ll continue to work to bring it before the full Senate for debate. Until then, I’m hopeful that Sony and Samsung and other manufacturers who have policies against discounting find that consumers will look elsewhere for affordable products.
As a businessman, I appreciate that retailers welcome flexibility in their business with customers. As a senator representing the people of Wisconsin, I know that discounting and discount stores play a vital role in family budgeting.
Why do Sony and Samsung care about consumer discounts if they are getting full price from the retailer? The WSJ article suggested it was to help Best Buy and Target. But doesn't Best Buy like to discount their TVs and put a big margin on cables and other accessories?
yes we know you think profits are evil for every other business but yours. "reap" give me a break. This makes no sense. Trying to set MAP pricing on retailers does not gain more profits for the manufacture who still sells to the retailer for whatever they want. The manufacture can only gain profits by having the retailers move more or increasing their wholesale cost per unit and hoping the retailer still moves the same amount of units. Your war on MAP pricing only hurts us little retail guys. Why do you hate small business Herb?
Here is an idea: Pay for your own damn arena!
They also make nothing on the TVs. All the revenue is in all that other crap they want to sell you, cables, warranties, accessories.
Got it, that makes perfect sense. Thank's Herb always on the forefront of what's important.