F & E Trading, LLC Responds to Canon USA Suit

[Roo]

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MAP pricing has been reviewed by the courts and found to not be price fixing. Go back and read some of the previous posts on this topic instead of just repeating talking points that are factually incorrect.

Price fixing occurs when competitors conspire to set the price of a commodity. If Canon, Nikon and Sony were meeting secretly to set prices, that might be price fixing. But MAP is not price fixing and no matter how many times you write that, it won't make it true.

You're assuming that the competitors in this instance are Canon, Nikon and Sony. The competitors in this instance are Adorama, B&H, etc. They're the people that benefit from Canon's MAP.

Do you even understand what cartel behaviour/price fixing is? I guess not because this is definitely not it. If it was Adorama and other retailers colluding to fix the price they sell products at, it is price fixing. If it was Canon, Sony, Nikon etc dictating the price cameras can be sold at it is price fixing. This is far from it. Canon set an advertised price for their products, and their products only, for their authorised sellers and those retailers are free to sell it for the price they choose so long as it's not advertised. Consumers are still free to shop around for the best deal they can get for themselves.

 

[AlanF]

My most recent purchase was a 7D Mark 2, bought in the UK with all duties and taxes paid. So it's exactly the same as buying from an authorised dealer (Canon have to honour the warranty - EU law) yet is 59% of the normal price! So a relatively small retailer can purchase Canon gear, ship it across the world, pay all the relevant duties + taxes and still sell it for 41% less than an authorised dealer. There is only one significant variable in this chain and that is Canon.

It would be interesting to know who this company way. Did you buy it from bricks and mortar? Or over the internet?
Many of these cheaper places are UK only in name and have a UK address for registration purposes - they are often Hong Kong companies and ship from there. Their second tactic is often to ship goods into the UK without declaring them and if the goods are discovered by customs the company pays the duty without complaint and works on the theory that only a small fraction will get caught in this way and the profit on the majority offsets the few times they pay the duty - so when they say all duties paid' what they really mean is 'it is paid if we get caught'. In addition to this many of them have T&C that says the purchaser is the importer - this avoids problems if at any time in the future you are stopped by customs when returning from holiday and they realise duty had not been paid on that item (it happens).
By the way, buying in the UK is NOT the same as 'buying from an authorised dealer'. Your warranty is with the shop, and any repairs are the responsibility of the shop - the difference is that when buying from an authorised dealer Canon, as part of the dealer network, agrees with the dealer that they (Canon) will pay the costs, not the dealer.

See my comments about Sale of Goods Act, agreeing with what you say. Also our Retail Price Maintenance Act of 1956 prevents manufacturers fixing prices.

What you say about VAT avoidance is also correct. A friend bought a £600 camera from a reputable HK outfit, who shipped it via Gemany with a Customs declared value of £60 for a "refurbished" camera.

 

[Roo]

...
Do you even understand what cartel behaviour/price fixing is? I guess not because this is definitely not it. If it was Adorama and other retailers colluding to fix the price they sell products at, it is price fixing. If it was Canon, Sony, Nikon etc dictating the price cameras can be sold at it is price fixing. This is far from it. Canon set an advertised price for their products, and their products only, for their authorised sellers and those retailers are free to sell it for the price they choose so long as it's not advertised. Consumers are still free to shop around for the best deal they can get for themselves.

If Adorama, B&H & others get together and collude on what the price should be, it is price fixiing and is illegal.

If Adorama, B&H & others approach Canon to set a minimum price that all authorized dealers sell at then it isn't price fixing (by the book) and is legal.

In both cases the end result is the same.

You missed the part where they can still sell below the advertised price, so the result is not the same.

 

[tr573]

But they cannot *advertise* that.

What good does selling for a good price do you if you cannot advertise that capability?

Precisely. Average Joe doesn't go to CPW to check the "street price" of a camera. If GID's ebay listing comes up @ 30% less on google shopping searches, guess where they are going.

 

[adventureous]

UNFOCUSED has a great post . Here is the Federal Trade Commission link about MAP and price fixing.

https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/dealings-supply-chain/manufacturer-imposed

 

[nhz]

But they cannot *advertise* that.

What good does selling for a good price do you if you cannot advertise that capability?

Precisely. Average Joe doesn't go to CPW to check the "street price" of a camera. If GID's ebay listing comes up @ 30% less on google shopping searches, guess where they are going.

Agree about that as well. It's big fun watching the EU price comparison websites for Canon cameras nowadays, LONG listings with identical prices, many prices 50-60% higher than in the US; plus often quite a few shops who have even higher prices (often resellers who advertise they are 'super cheap' and prey on clueless buyers) and maybe sometimes one Amazon seller that is slightly below the MAP because they are from outside the EU.

Real camera shops are disappearing and the few remaining retailers who have stock have little incentive to go below the MAP price. Even if I assume I can negotiate a bit on price when I stop by at a real camera shop that now costs me a day and a lot of money to visit, because there aren't any serious camera shops left in my area.

Price control by Canon is a reality. Competition is gone this way and I don't think this is good because the really big existing internet stores will win in these conditions because they are 'everywhere' with their advertising. I can understand if Canon possibly wants to assure that customers get a minimum level of service and support, but I doubt this is helping.

Regarding comments from some others about 'cheaper' vendors skipping on import charges and VAT: I don't doubt this happens in some cases, but skipping import charges is not possible if you have any significant business volume and some of the cheap sellers are in the UK, not in HK or another location outside Europe. I cannot imagine these companies have been selling loads of camera gear from the UK without paying any VAT for years. There are some loopholes in the EU e.g. until recently 'camera clubs' etc. could be exempt from VAT but as soon as they start behaving like a business this no longer works. It's just as unlikely as massive fraud with wrong serial numbers etc.

I worked in development, retail and distribution of imaging equipment for many years. The main reason for grey imports is often that some big box movers get HUGE discounts from the local distributor, especially when the manufacturer needs to move a lot of stuff at the end of the quarter or business year. Distributors will offload part of that to some obscure foreign company in order to somewhat protect the local market and voila, there is your grey import problem. Assuming that the price that the camera shop pays to the distributors includes a certain service level, all products that have been sold into the retail channel should be entitled to service (maybe in another country, depending on the conditions). I think Canon should work on that, instead of the current price fixing.

 

[tr573]

Regarding comments from some others about 'cheaper' vendors skipping on import charges and VAT: I don't doubt this happens in some cases, but skipping import charges is not possible if you have any significant business volume and some of the cheap sellers are in the UK, not in HK or another location outside Europe.

If they were importing one camera via airmail, I could see people easily getting away with this in the US (you can get just about anything into the US via airmail with very little chance of customs catching it, so long as it's not a ridiculously huge package. I've ordered dozens of boxes of cuban cigars and never had a single solitary one opened or seized)

But, none of these guys is importing onesie twosie cameras. They are buying pallets of them. How are you getting a pallet of cameras into the country and avoiding customs duties on them? You would have to be paying off a lot of people.

 

[Deleted member 91053]

My most recent purchase was a 7D Mark 2, bought in the UK with all duties and taxes paid. So it's exactly the same as buying from an authorised dealer (Canon have to honour the warranty - EU law)

That is, unfortunately, incorrect. Your contract is with the dealer not the manufacturer - see http://www.consumerrightsexpert.co.uk/shop-manufacturer-responsible-for-faulty-goods.html

Our sale of goods act is usually to the customers advantage because it prevents the dealers washing their hands of responsibility for faulty products. But, conversely, it takes responsibility away from manufacturers if you buy from dodgy dealers.

Interesting AlanF, that doesn't tie in with the advice that I have read - I will have to re-investigate it - I certainly don't want to dole out incorrect advice!
I knew that act offered protection but wasn't thinking along those lines at the time. The camera also came with an extended "Seller" warranty but this will vary as some importers don't hang around very long!
The relevant page from Canon makes no mention of not honouring warranties and I know of Canon users who have had Grey Import cameras repaired under warranty without issue. Still this is an area to check on.
Thanks for the Heads UP.

From the Canon website:

Grey Market/Parallel-Import Products
Currently a number of retailers are importing genuine Canon goods from outside the European market, (which encompasses the European Economic Area (EEA) plus Switzerland) for sale to UK and European consumers. Such products are known as “grey market” or “parallel-import” products.

UNFORTUNATELY, CASHBACK AND OTHER PROMOTIONS ARE NOT VALID ON THOSE PRODUCTS NOT INTENDED FOR THE EUROPEAN MARKET.

The problem with grey market products

European consumers may find that grey market products do not meet their expectations because the products were not intended by Canon for the European market and did not undergo localisation by Canon. Accordingly consumers may find that a grey market product is not correctly localised, for example:

(i) the box may not contain:

a UK power cord or contains a UK power cord or adaptor which was not provided by Canon and has not been quality checked by Canon;
the correct software discs or contains illegal copies of software which does not function;
an original English manual but contains a photocopy of the original English manual or a non-English manual;
a genuine Canon European warranty card but instead may contain a third party warranty card, a warranty card from a reseller based outside Europe or no warranty card at all;
(ii) a Camera product may not display a valid serial number.

As grey-market products are not intended by Canon for the European market, such products are ineligible to benefit from UK/European promotions, including Canon’s Cashback offers.
If in doubt about whether any Canon product is intended for the European market, please check with the reseller or supplier or refer to the “Where to buy” pages on Canon’s websites for a non-exhaustive list of in-store and online retailers (or “E-Tailers”) selling products approved for sale in Europe.

Canon’s Cashback and other promotional offers are not valid on Canon products not intended for the European market.



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[Deleted member 91053]

There is only one organisation/company that is responsible fro the "Grey Market" and that is the manufacturer - in this case Canon.

Nope. Grey markets are cheaper for two reasons: they don't have the overheads that bricks-and-mortar shops do and secondly almost all grey importers are avoiding import duty. Have you ever noticed how the saving on their prices is remarkably similar to the VAT/import duty?


Note that the figures that I quoted were inclusive of all relevant taxes/duties. Just checked the UK Gov site = no duty, just vat at 20%. So if they avoided VAT that would add £154 to the price and it still would have been £376 cheaper. Additionally my price comparison was against the UK's biggest Box Shifter so the Bricks and Mortar doesn't wash. Incidentally my nearest "Bricks and Mortar" high street retailer often shades or at least equals them on prices - Carmarthen Cameras = great shop with excellent staff. Wish I could shop there more....

If I have posted anything here that you KNOW to be wrong then I am more than happy to be corrected eg AlanF's post.
I have simply related my experiences and reading of the regulations.