Senator Herbert Kohl (D-WI) has introduced the Discount Pricing Consumer Protection Act, an amendment to the Sherman Antitrust Act and action we like to see on behalf of the small business owner. To the Sherman Act, his legislation adds:
“Any contract, combination, conspiracy or agreement setting a minimum price below which a product or service cannot be sold by a retailer, wholesaler, or distributor shall violate this Act.”
Our friends at eBay, the US Federal Trade Commission, and Burlington Coat Factory support the effort, having pressured the Senate to ban the practice of vertical price-fixing or “retail price management” (RPM). Simply, this is an effort to eliminate manufacturer / retailer collusion to establish a minimum price at which products must be sold. In theory, a good practice for the manufacturers and retailers who can benefit from the restrictions but a yoke around the neck of small businesses, internet retailers, and efficient sellers, such as those on eBay, who can afford to offer better prices to consumers.
Retail price management "guarantee[s] that consumers will pay higher prices" on a wide variety of products, added Pamela Jones Harbour, a member of the FTC. "Consumers usually do not realize they pay substantial retail-price management [RPM] premiums."
Is this good for you? Let us know how it affects your business. If you like the prospect, throw your weight behind Senator Kohl and eBay.
