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Author Topic: Does Minimum Advertised Price apply to auctions?  (Read 5509 times)

Nostrada

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Re: Does Minimum Advertised Price apply to auctions?
« Reply #15 on: October 23, 2012, 03:01:04 AM »
Today, I put in a formal complaint to the Canadian Federal government agains't Canon for breaching the Free Trade Agreement.  They can not block the sale of goods to Canadians in the United States just as we can not block the sale of goods and services to US citizens or companies in Canada.  I believe the intent of the free trade agreement is that they have to treat us the same.

My expertise is EU antitrust law, not necessarily US antitrust law and I am not familiar with the provisions of the free trade agreement between Canada and US. Having said that, I'd be interested to know how your complaint progresses, out of professional curiosity, so please try to add to this thread every so often. Thanks


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Re: Does Minimum Advertised Price apply to auctions?
« Reply #15 on: October 23, 2012, 03:01:04 AM »

markbyland

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Re: Does Minimum Advertised Price apply to auctions?
« Reply #16 on: October 23, 2012, 01:41:19 PM »
I've seen a lot of answers come through this little discussion but not one acknowledges the truth, only what people *think* should be true.

The facts are:

1) Manufacturers set the prices for retailers (large or small). A violation will ["should" but often _does not_ (when it comes to the big kids)] warrant some form of punishment from the manufacturer. (ie; no product shipping for period of time, etc - kind of like being grounded)
2) MAP is part of the dealership agreement that both parties enter in to and sign. Argue that all you want. It's truth. [Ask any Rep. Please, so we can stop arguing about it.]
3) Instant savings are not supplied by the Manufacturer - they are handled by the dealership and thus are reimbursed by the manufacturer after jumping through a small series of flaming hoops - screw up the reimbursement process and the retailer automatically loses their money.
4) Any comment regarding dealer inefficiency is simply ignoring the above three facts, entirely
5) Providing 'work around' tips is simply implying that you're willing to do some thing illegal to obtain your product.


pharp

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Re: Does Minimum Advertised Price apply to auctions?
« Reply #17 on: October 23, 2012, 03:28:13 PM »
I worked in one of those mom & pop camera shops during college, and assuming the situation hasn't changed - the biggest problem they had was the manufacturers quantity pricing structure. The difference in price between buying 2 of some camera and 100 was SIGNIFICANT. The big boys could make a profit selling at the small guys buy price.  The principal seems sound enough - you get a break if you buy alot of something, but this puts the small guy at a disadvantage from the start. If Canon, Nikon, etc cared about the small shops they'd sell equipment to all retailers for the same price regardless of qty - but I suspect they really don't.

On a couple of occassions, I remember the owner buying cameras on sale from a big outfit because the price was cheaper than what he could get as a dealer from the manufacturer.

It's a difficult situation - half the population will be out of work if everyone only buys from efficient warehouse retailers. Should we care?
« Last Edit: October 23, 2012, 04:11:09 PM by pharp »

unfocused

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Re: Does Minimum Advertised Price apply to auctions?
« Reply #18 on: October 23, 2012, 04:12:59 PM »
Lots of confusion parading as truth on this thread, in part because people are mixing MSRP and MAP. Two different things. 

Manufacturers Suggested Retail Price is the price the manufacturer recommends that a product sell at. Traditionally, in photo equipment there has been wide variation between MSRP and street price (actual price generally paid). The difference has narrowed in recent years. Purpose of MSRP is to give retailers an idea of what the product should be selling for, according to the manufacturer. Depending on the manufacturer this could be accurate or a total fiction. Sigma, for example, tends to set an unrealistic MSRP on their lenses, that almost no retailer honors.

MSRP is just as the title says: "suggested."  My understanding is that in the U.S. at least, there are legal restrictions that prevent manufacturers from enforcing the MSRP as a firm rule. Thus, the growth of MAP or Minimum Advertised Price. MAP says the retailer cannot advertise a price below a certain number.

MAP is designed to help smaller retailers compete. I don't know the specifics of either Canon's or Nikon's dealer agreements, but it appears they enforce the MAP during rebate times (which have become almost year round). No retailer can advertise an item for sell at less than the MAP and still participate in the rebate program.

The issue, of course, is what constitutes an "advertised price." Again, not knowing the specifics of the agreement between the manufacturer and the retailer, I can't say for certain. But, it appears that there are some exceptions. As the OP suggested, it appears that MAP does not, in some cases, apply to auction sites. Similarly, it appears that there are exceptions for direct links from websites. For example, both Canon Rumors and Canon Price Watch have occasionally offered special links for discounted prices from either B&H or Adorama. In those cases, if you follow the website link, you receive a lower price than if you go directly to the merchant's web page.

I don't know if these special deals and auctions violate the MAP agreement, but I suspect that the big merchants like B&H and Adorama wouldn't use them if the did – too much at risk.

Is MAP price-fixing? I doubt it. Again, not knowing the specifics of the agreement, makes it hard to know. But, from what I understand, MAP is linked to a benefit given the retailer. For example, if you want to participate in the rebate program, you have to adhere to MAP. The retailer has the choice, they could turn down the rebate program (of course no one would do that), so it's voluntary and not mandatory. Similarly, most manufacturers offer "co-op" programs for advertisements (If you advertise their product, using their suggested marketing materials, they compensate you in some way) Again, it is not coercive, but it is a strong incentive to adhere to the agreement.

The voluntary nature of the agreement probably keeps it legal. If there would be a successful legal challenge, I suspect it would require proving that the agreement is not truly voluntary, but is so coercive that it is in fact price-fixing.  However, one thing the manufacturers have going for them is that they are clearly in a competitive market. Canon is not colluding with Nikon or Sony to fix prices, they are simply using incentives to keep their prices consistent among retailers.

The above is based on my understanding of typical retail practices and isn't meant to imply I have first hand knowledge of the specifics of the agreements between Canon and its retailers. Nor do I pretend to be a trade attorney (although I did stay at a Holiday Inn recently).
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Pag

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Re: Does Minimum Advertised Price apply to auctions?
« Reply #19 on: October 24, 2012, 01:07:45 PM »
Quote
But, from what I understand, MAP is linked to a benefit given the retailer. For example, if you want to participate in the rebate program, you have to adhere to MAP. The retailer has the choice, they could turn down the rebate program (of course no one would do that), so it's voluntary and not mandatory.

Isn't that price fixing among the retailers enforced by the manufacturer by another name? By refusing important benefits to retailers who refuse to participate, they effectively punish them. If they don't participate in the price fixing scheme, Canon will ensure they are less profitable than if they did -- that's about as coercive as they can be. It's just a loophole to get around the restrictions against price fixing.

HurtinMinorKey

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Re: Does Minimum Advertised Price apply to auctions?
« Reply #20 on: October 29, 2012, 09:16:54 AM »
I can't help but feel Canon's move here is in response to both Beach and Adorama selling a lot of 5D Mark III's for a substantially less price than they normally do. This would quite likely led to lots of calls from Canadian (r)etailers bitching about how they are being undersold and can't do a thing about it.

It could also be that Canon (USA) is planning to reduce the cost of certain items to further selling more of them but this seems unlikely.

Be that as it may, I can't help but wonder if "MAP" applies to auction websites such as eBay and if it doesn't then there's a backdoor here that is still wide open.

It's minimum advertised price, so of course the restriction does not apply to auctions.

The reason MAP exists is to provide margin for the big retailers, and thus encourages them to market the product in store.  It also makes it easier for the large retailers to implement their price protection policies( which are always in terms of advertised price).

Despite what Canon, or any other manufacturer wants you to believe, this has nothing to do with protecting  "high service" "mom and pop" stores.

Mooose

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Re: Does Minimum Advertised Price apply to auctions?
« Reply #21 on: October 31, 2012, 05:17:01 PM »
Today, I put in a formal complaint to the Canadian Federal government agains't Canon for breaching the Free Trade Agreement.  They can not block the sale of goods to Canadians in the United States just as we can not block the sale of goods and services to US citizens or companies in Canada.  I believe the intent of the free trade agreement is that they have to treat us the same.

I believe the Free Trade Agreement only applies to governments not companies.
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Re: Does Minimum Advertised Price apply to auctions?
« Reply #21 on: October 31, 2012, 05:17:01 PM »

HurtinMinorKey

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Re: Does Minimum Advertised Price apply to auctions?
« Reply #22 on: October 31, 2012, 10:38:52 PM »
Today, I put in a formal complaint to the Canadian Federal government agains't Canon for breaching the Free Trade Agreement.  They can not block the sale of goods to Canadians in the United States just as we can not block the sale of goods and services to US citizens or companies in Canada.  I believe the intent of the free trade agreement is that they have to treat us the same.

I believe the Free Trade Agreement only applies to governments not companies.

 MAP is a legal form of retail price maintenance, therefore it is subject to the laws of whatever country the good is being sold in. It is not a violation of free trade agreements since the policy is instituted by the manufacturer in the absence of any government intervention. However, I think one could make an antitrust argument in US court by demonstrating harm to the consumer for the reasons I mentioned in my earlier post.

AlberD

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Re: Does Minimum Advertised Price apply to auctions?
« Reply #23 on: November 01, 2012, 07:18:09 AM »