The Supreme Court made a huge decision today which will likely hit everyone in the pocket book and it will likely result in some major changes in the retail market in the near future.
The Supreme Court ruled 5-4 that manufacturers are allowed to set a fixed price for their product and forbid retailers from discounting them. This overturns the previous anti-trust law that stood for nearly 100 years which prohibited retail price fixing. Manufacturers can now enforce “resale price maintenance agreements” which forbid retailer discounting for both online and traditional retailers.
That means that the brand manufacturers can now set a firm price for the goods they deliver to retailers and retailers must abide by selling them at these prices. The results are that you may see the most expensive Christmas retail season as stores may be forbidden by manufacturers to discount their brand items.
This could also mean the end of negotiating prices for new cars at the dealership as this ruling opens up the possibility that car manufacturers can set the retail price that their cars are to be sold at. Discount retail chains may find that they are not able to discount and newly released books may become a lot more expensive since they will not be discounted. Basically the law will make that “suggested retail price” the actual retail price.
While the Supreme Court ruled that the old law was outdated and that competition between competing manufacturers would keep prices in check, the Consumers Union believes that consumers will be seeing higher prices as a result of the decision.