Is Halcyon price fixing?

[Genesis]

in suing anyone is if they attempt to retaliate against me for bringing a situation that looks like an illegal action to the proper authorities and asking them to do their job.

Why? Because that makes the illegal acts both personally directed against me and demonstrates to me the intent behind the practice - not only is it not an accident but protecting that illegal enterprise is important to them.

I like the boycott concept as well. The problem is that essentially all of the top manufacturers do the same thing - so what are you going to do? Leave the sport entirely? Its ineffective to direct a boycott towards or against one company when they're all pretty much doing the same thing.

Don't forget that the SRA got nailed for this kind of thing when a "rogue" manufactuer tried to break the rules and sell directly. They were threatened with blackballing and negative press by both retailers and magazine publishers!

Have things changed much since the demise of SRA? Or did it just go underground and continue in the same vein?

Why am I doing this?

Simple - show me a manufacturer who doesn't practice these kinds of restraints. Show me an option that can be effective using nothing more than market pressure.

Good luck; I'll be waiting and, until then at least, I'm going to agitate for investigations and, if warranted, corrections.

 

[The Chairman]

TUSA and A+ marine... they do not even TRY to fix prices.

 

[Genesis]

Got a dealer contract from Tabata USA (Tusa) around?

Care to fax it to me, or post it?

 

[WreckWriter]

NetDoc once bubbled...
I hear you Tom... but devining intent off of a message board is a bit of a stretch.

Yea, probably so. You know me though, I'm usually willing to stretch a bit

Tom

 

[jonnythan]

I see what you guys are saying... but from what I read, setting a minimum price is per se plain illegal. A friend of mine is a lawyer who has done some antitrust stuff.. I'll email him about it and see what he has to say.

Of course IANAL, but it does appear to me (and Genesis) that they're conducting business illegally.. and, IMO, unfairly. I don't think I'd agree with a lawsuit, because this seems to be the DOJ's job.

I'm not exactly sure where I stand on some of this, but I feel the letter and phone calls were certainly the best way to go.. bring it to the attention of the guys whose job it is to stop such practices.

 

[seabass]

Setting a minimum price is not necessarily illegal. The idea of Vertical Price Restriction is mitigated by the Colgate Doctrine (do a google search on Colgate Doctrine). The Colgate Doctrine essentially says that in private enterprise an entity has the right to do business with whomever it wishes regardless of the reason (I would guess that this is mitigated by antidiscrimination laws - race, sex, age, religion). The behavior that is ok is the following:

Mfg says that all resellers must sell at some price. If a reseller does not sell at that price the Mfg can refuse to deal with that reseller.

The behavior that is not ok is the following:
Mfg makes a contract which says that the reseller must sell at a minimum price or will not be allowed to sell the mfg's products.

Mfg negotiates with reseller to determine what the minimum price is going to be.

Mfg says that all resellers must sell at some price. If a reseller does not sell at that price, mfg tells the reseller that unless he sells at that price he will no longer be able to sell mfg's products. No negotiation is allowed.


Again, I am not sure what the nature of the Price Fixing is between the mfg's and resellers. So potentially they are doing something illegal. However it is also possible that what they are doing is absolutely legal.

I personally don't think it is deplorable at all because that type of behavior results in a huge opening for other competitors to come in and disrupt the system and take huge business. In the short run some LDS might get hurt, but that is always a risk in business.

 

[Genesis]

See the following cite:

http://www.ripon.edu/faculty/bowenj/antitrust/PRKDAVIg.htm

Specifically:

In involving the wholesalers to stop the flow of Parke Davis products to the retailers, thereby inducing retailers' adherence to its suggested retail prices, Parke Davis created a combination with the retailers and the wholesalers to maintain retail prices and violated the Sherman Act. . . . If a manufacturer is unwilling to rely on individual self-interest to bring about general voluntary acquiescence which has the collateral effect of eliminating price competition, and takes affirmative action to achieve uniform adherence by inducing each customer to adhere to avoid such price competition, the customers' acquiescence is not then a matter of individual free choice prompted alone by the desirability of the product. The product then comes packaged in a competition-free wrapping - a valuable feature in itself - by virtue of concerted action induced by the manufacturer. The manufacturer is thus the organizer of a price-maintenance combination or conspiracy in violation of the Sherman Act.

Sound familiar?

A further essence of the problem here is that it is effectively a lock-step action by essentially all of the major vendors in the particular competitive space described. As such it appears that there are elements of horizontal restraints as well in the conduct in question, which makes it even more onerous.

(BTW, this case post-dates the Colgate Doctrine and it is explicitly referenced in the opinion)

 

[DivePartner1]

I agree, SeaBass. The retail agreements MikeF describes are in accordance with the law--no vertical price restraints. We've seen nothing to show the existence of any mandatory pricing agreements, nor any suggestion of any effect of the (unproven) policy on interbrand competition. Both are required to constitute a price fixing violation.

If retailers are inclined to the follow suggested retail prices--or even charge premiums for sought after goods--that is entirely up to them. If I want to buy a TBird today, I'll have to pay more than the suggested retail price. That is not a crime.

Also, they have viable competitors who charge what they want.
In a world of capitlism for consenting adults, I can choose OMS or Dive Rite. Halcyon may even be enhancing competition by driving down pricies of competiting products perceived to be inferior.

Not everything is illegal here in the Nanny-state, yet.

 

[Scuba]

I think the bigger issue with respect to price fixing is that as the laws currently stand, they favor the manufacturer. They are able to dictate who they do business with. They have the legal right to refuse to do business with a legal retail establishment. What this means is that if you have a manufacturer intent on price fixing, the elimination of what could be determined to be an illegal clause in a contract, will not prevent said party from successfully engaging in price fixing through other means.

There are laws addressing specific issues with respect to price fixing. But other laws facilitate circumventing this intent For all practical purposes allowing the establishment of a business environment where the exact opposite of the price fixing laws intent can dominate. This leaves it to the market to set prices.

This is how I see this issue from my limited perspective as a layman on this issues.

Nevertheless, if there is illegal activity taking place it should be rooted out. Barring that its up to each of us to do our share in order to improve the system.

This started out as a Halcyon topic. Lets name names.

Aqualung

charge: poor to no customer service.

Quote from their website with the addition of my comments.

Beware of any retailer that offers to sell and ship our life supporting products by mail, for orders placed by phone or the Internet. These retailers are NOT authorized Aqua Lung Dealers. All authorized Aqua Lung Dealers must execute a Dealer Agreement that does not allow the sale of Aqua Lung products except "in-store." Many Aqua Lung dealers advertise on the Internet, but they are not allowed to deliver our products other than "over-the counter." This is our assurance that you will receive the proper pre-sale, point-of-sale, and post-sale assistance, and that only trained and certified divers will use our products. ( PLEEEAASSSE - SPARE ME, my insert) If you obtain our product from one of these retailers, your warranty is therefore not valid and we cannot offer you the assurances of quality and satisfaction afforded by the Aqua Lung Warranty Program. ( THANK YOU FOR STANDING BEHIND YOUR THE PRODUCT WHICH YOU JUST FACILITATED THE SALE OF TO ME, my insert) If you would like to verify whether or not a retailer is an authorized Aqua Lung Dealer, please call: (760) 597-5000.

I will not buy Aqualung, which I own, untill they change to a more friendly customer service policy. I abhore someone claiming to be doing something in my best interest, when in fact they take it upon themselves to determine what such is. End result - they are working against my best interests as determined by me.

 

[The Chairman]

but in talk's with their representative, who had no problem with me providing his equipment to my students at a cost+ basis. As soon as I get a mortar and brick address for them to use, I will be doing business with them.