Supreme Court Opens Door To Price Fixing


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The Supreme Court, in a typically 5-4 decision, has reversed a 96 year old rule that disallows manufacturers from dictating retail pricing. The decision is expected to have a wide effect on consumers.

37 states and several consumer groups had offered their opposition to a Bush Administration sponsored effort to remove the ban on pricing deals between manufacturers and resellers. The court had ruled 96 years ago that such deals where an automatic violation of the Sherman Antitrust Act.

What this means to consumers is that retailers may find themselves unable to give deep discounts on products resulting in fewer items going on sale. It is believed that the Internet, home of steep discounts, may suffer the most.

The belief of the Bush Administration and their conservative majority counterparts on the court is that the profit margins guaranteed through such price arrangements make it possible for more competition to enter the marketplace.

I had always thought that the conservative ideal was to let the market decide what was best for the market. How does allowing manufacturers to dictate the retail price accomplish that goal?

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