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Fender "Price Fixing"?


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9 hours ago, The Shark said:

Well, it is the UK. Just because the US speaks the same language doesn't mean the two countries share concepts the US wrote into the Constitution and Bill of Rights. Among other thins, the US requires probable cause. Without probable cause, you don't need no steenkin' warrant. You can just go fishing.

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1 hour ago, JohnnyB said:

Well, it is the UK. Just because the US speaks the same language doesn't mean the two countries share concepts the US wrote into the Constitution and Bill of Rights. Among other thins, the US requires probable cause. Without probable cause, you don't need no steenkin' warrant. You can just go fishing.

You ever hear of the IRS?

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4 minutes ago, The Shark said:

You ever hear of the IRS?

Yeah. I send them a little love note every year around April. I tuck a little money in the envelope to help 'em get by.

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"In response to the inquiry the Music Industries Association (MIA), the UK trade body for the musical instrument industry, reissued advice explaining the intricacies of competition law. It advises both suppliers and retailers not to agree with one another to sell an instruments at a set price or denote specific geographical areas as exclusive to one store."

Since when is it wrong for a company to require their own product be sold at a specific price or only in a certain area? What kind of commie crap is going on in Europe that people are not free to conduct business freely? And with all the trouble in the world, you'd think they'd have some bigger fish to fry than instrument companies. They're like cops who ticket children for riding their bikes on the sidewalk.

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Price fixing is illegal here, too.  If all the grocery stores agreed to sell a gallon of milk at a specific price that would be illegal.  If they do it by coincidence it would not be illegal. 

Franchises may have set prices, and instrument manufacturers have franchise agreements.  All the online stores in the USA usually have the same price on a lot of merchandise because of MAP agreements with manufacturers.  The MAP keeps someone from blowing out stuff so low that no other store will try to sell the brand. 

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24 minutes ago, FGJ said:

"In response to the inquiry the Music Industries Association (MIA), the UK trade body for the musical instrument industry, reissued advice explaining the intricacies of competition law. It advises both suppliers and retailers not to agree with one another to sell an instruments at a set price or denote specific geographical areas as exclusive to one store."

Since when is it wrong for a company to require their own product be sold at a specific price or only in a certain area? What kind of commie crap is going on in Europe that people are not free to conduct business freely? And with all the trouble in the world, you'd think they'd have some bigger fish to fry than instrument companies. They're like cops who ticket children for riding their bikes on the sidewalk.

The UK has never known for free market capitalism. 

 

This guy can confirm: 

king-george-iii.jpg

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In an effort to keep the discussion academic rather than political or ideological, I'll offer this:  Most of these types of laws and codes are enacted with the objective of promoting competition rather than stifling it. If you take the time to actually read the primer shown in the link that FGJ provided, it echoes regulatory language found in most of the major industrialized nations, including here in 'Murica (although vertical price fixing--essentially what Fender is being accused of doing here--was ruled by SCOTUS to mostly unenforceable under the Sherman Act). This is not to say that such regulations are actually effective in achieving the stated goal(s), but the intent is clear. In its purest form, "price fixing" is a form of collusion within a specific industry sector and or product/market/geographic segment. Such manner of collusion, in theory, would not seem to serve the consumer in any positive and measurable way, as it effectively neutralizes (if not, limits) choice by ensuring that a retail player (a mom-and-pop shop, for example) cannot freely engage in competitive conduct involving retail pricing. In effect, the laws are an attempt by the state to intervene in situations where market power is concentrated in the hands of few players (typically, but not always, suppliers) and anticompetitive conduct emerges.  The worst-case scenario would involve market actors manipulating Adam Smith's "invisible hand" to create for themselves an advantage that would not be feasible in open markets but for the brokering of a special arrangement via conspiracy.  A more benign case would be what we see here with Fender.  In the era of online retailing and easily accessible shipping services, I'm not convinced (yet) that the guitar-buying consumer is being subjected to irreparable harm, nor do I think the market is being artificially limited. 

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@Biz Prof I quite agree with your assessment of the situation.  I fail to see how the average consumer is harmed by FMC’s actions in this case.  I see the potential for a very small, what essentially amounts to a niche market, being affected.  People who wish to buy a new, Fender guitar.  People buying other brands, G&L, Ibanez, Suhr, Nash, PRS etc are not harmed. People buying used guitars, including Fender are, likewise, unaffected. I could see this action being warranted if all makers of a similar type of guitar worked together to set market price. That would be where I’d expect to see intervtion by a regulatory body.  

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Very interesting.  There’s all sorts going on here at the moment with Brexit heating up.

A firm I worked for 15 years ago was raided by the OFT (same as the CMA to all intents) and it is scary stuff.

Simultaniously 8 head offices of different companies were raided, including our own, by  “Men in Black”.  Literally head to toe in matching black suits. Two of the five at ours were lawyers.  We were served a caution and the office froze.  The company boss (and owner) was not there so I dealt with them directly.  They didn’t smile much.  

After about 5 hours they left.  It later turned out many months  later that they had a case and fines were monumental.  Most of our employees had bailed by the time the fines were handed out, including me, and the company I had worked for went bust.

They often offer leniency fines for tip offs.  I remember one firm missing out on being fined by literally fessing up on what had been going on.  

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I wasn't addressing monopolies or cartels that fix prices in an industry (I'm aware of the damage monopolies and cartels may do to a free market). I was addressing the ability for a manufacturer to set prices (or any conditions) for dealers selling their products, which shouldn't violate anti-trust laws. Moreover, given that guitars are not a necessity (like food, water, etc), that's all the more reason for the state to leave manufacturers of such products alone. 

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I have long suspected collusion between milk producers of New England and tv weatherman!

 like, why do you need milk if your power is going out, and that's pretty much the 1st thing to

go bad?    

 

 but more seriously,  worked in electronics distribution for many years,  an indie.. I see both sides here... 

it would be really tough to put 100k worth of a manufacturers product on the shelf, only to have

customers be able to buy at close to your cost by one of the nationals...    sure the national deserves

a better price, but I'm sure they grind the crap out of the mfg,  and there's other kickbacks you don't see

(extended terms,  cooperative advertising funds, stock rotations, rebates, etc)    but as a mfg, is it really

safe to have an unnaturally high amount of business thru a handful of customers,   especially shaky ones... 

seen it many times.   think this is why your seeing Fender experiment with direct sales.                . 

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