Archived posting to the Leica Users Group, 1999/12/29
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In a message dated 12/29/99 7:09:37 PM, rjr@usip.com writes:
That's an interesting insight. When I had Antitrust at Michigan with Tom
Kauper, he never told us about the Department's stand on RPM (he probably
should have, since he was in it up until the 80s. I think there's definitely
a case to be made for why you don't want coercive tactics being used to
stifle competition at the consumer end. I don't see why Leica can't set its
net price to dealers, but I have a real problem with their fixing prices past
that point. From an economic standpoint it stifles competition. From a moral
standpoint - what do they care? They have already made their buck when the
item lands at the dealer. Sub-Zero does even more egregious things with their
built-in refrigerators.
BTW: the same thing is going on with the Hexar RF. I found out that no
authorized Konica dealer can advertise the package for less than $1999, which
makes me wonder if Camera World is gray at $1599.
Dante
<< Gaifana wrote:
"Leica does fix their prices within a very narrow range. Smacks of illegal
resale price maintenance to me, but no one seems to care - or maybe the
Antitrust Division has bigger fish to fry (Microsoft?)."
The Antitrust Division of the US Department of Justice does not generally
bring vertical resale price maintenance suits. They have been openly hostile
to the economic theory that underlies making resale price maintenance
illegal. The Federal Trade Commission has been a little more inclined to be
involved in such areas, but not significantly so.
Leica is free to announce a resale price for the product, and then refuse to
deal with any dealer who does not follow the price list. They cannot,
however, coerce the dealer into charging the price. It is sort of one chance
and you are out.
It is very expensive to be a Leica dealer. Imagine the investment in
inventory you must make, and sometimes exceptionally long time it takes to
sell some items (note the presence of 10 year old "unsold" lenses in original
boxes.) Further, your sales people must be trained to demonstrate the
cameras and their features. That all costs lots of money. If you are going
to have to discount on top of that, well you get the picture.
Robert Rose
Trial Attorney, Antitrust Division of the US Department of Justice 1975-1980
</XMP>
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Date: Wed, 29 Dec 1999 16:03:22 -0800
From: "Robert Rose" <rjr@usip.com>
To: <leica-users@mejac.palo-alto.ca.us>
Cc: <Gaifana@aol.com>
Subject: Leica prices = resale price maintenance
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