Archived posting to the Leica Users Group, 1999/12/29

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Subject: [Leica] Re: Leica prices = retail price maintenance
From: Gaifana@aol.com
Date: Wed, 29 Dec 1999 20:57:45 EST

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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From: "Robert Rose" <rjr@usip.com>
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Cc: <Gaifana@aol.com>
Subject: Leica prices = resale price maintenance
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