DOJ Responds to Public Comments

[rkw]

Originally Posted by JoeD

Is it still a free market when those who are colluding to raise prices are also putting pressure on any competitors who decide to price differently? For example by not allowing a certain publisher to get their book app on the iOS app store.

I have no problem with individual companies setting high prices, if it's more than I'm willing to pay, I do without or go elsewhere. However, that works under the idea that a market will eventually adjust and if prices really are too high it opens room for a competitor to enter. Collusion prevents that.

exactly. Few people realize this "Agency" model has been in place in our grocery stores for over a decade now. Only they call it JIT (just in time purchasing) where everything on the shelf is basically on consignment.

Notice that major grocery stores no longer have night stalking crews to restock shelves? It's because the shelves are now stocked and maintained by the distributor for most everything in the store.

Prices too are not set directly by the store. Even sales are non-competing because the same vendor stocks the shelves in every store in town (I'm in a small town but we eat so there are 4-major and two minor groceries with a soon to be completed Walmart Superstore renovation adding a 5th major chain grocery. I'm not sure how Walmart handles their grocery though.

No matter the Agency model along with a court decision on MAP pricing has all but ended the "free market". Sure new companies can try to get into the mix but good luck with that as the capital needed to even get a toe in the water makes it impossible to even get the major retailers to answer the phone. The production capacities for start-up goods producers is next to nil. Fact it the major brands have the production capacity already tied-up. That was what Apple did with the iPhone...they pre-purchased all the production capacity of components the assembly facilities. Well not all but enough to influence the market and they is why other companies lagged, there was simply nowhere to make the darn things let alone the buy the guts to put together.

Face it people who understand what wheeling-n-dealing in business was are a dying breed. There are executives today who never will know what a real sale is...they never shopped around for anything to find a good deal. they just went to the widget place and paid the price because that was the way it is done today. Heck today kids feel a couple grand a year in fees for that cell phone in their hand is just fine or their devices need only last until their next "upgrade" period occurs. They don't get it that they are really paying 3-4x the value of that phone before the monthly fees. Good marketing but bad for society long term. Money out of the hands of those who work for a living into the coffers of faceless corporations.

And none of this is to make life better for people or society only for the tiny slips of paper with numbers and images on them and the peepholes who hoard them. Well to paraphrase HhGTTG anyway.

Sigh, I remember complaining when my phone bill was $12/mo back in college. yeesh....

[murraypaul]

Originally Posted by rkw

exactly. Few people realize this "Agency" model has been in place in our grocery stores for over a decade now. Only they call it JIT (just in time purchasing) where everything on the shelf is basically on consignment.

Notice that major grocery stores no longer have night stalking crews to restock shelves? It's because the shelves are now stocked and maintained by the distributor for most everything in the store.

Prices too are not set directly by the store. Even sales are non-competing because the same vendor stocks the shelves in every store in town

Maybe this is different where you live, but what you've described doesn't match reality in the UK at all.
Prices are set by the supermarkets, and they do stock their own shelves.

[JD Gumby]

Originally Posted by murraypaul

Maybe this is different where you live, but what you've described doesn't match reality in the UK at all.
Prices are set by the supermarkets, and they do stock their own shelves.

Supermarkets in my area stock their own shelves - except for sodas/pops, potato chips (and related items, like nachos), bread, and milk, which are generally handled by the driver of the truck that delivered them.

[John F]

Originally Posted by JD Gumby

Supermarkets in my area stock their own shelves - except for sodas/pops, potato chips (and related items, like nachos), bread, and milk, which are generally handled by the driver of the truck that delivered them.

It is similar in my area (the NE US). Except I don't think there is agency pricing: most stores have a normal price of $4.49 (which I believe is MSRP (what is printed on the packaging)) for Doritos, Walmart has them for $2.49. Could be Agency pricing, but I have my doubts.

[Graham]

It should also be pointed out, yet again, that agency pricing wasn't the issue here. It was the collusion to bring about agency pricing that was the subject of the DOJ case.

Graham

[John F]

Originally Posted by Graham

It should also be pointed out, yet again, that agency pricing wasn't the issue here. It was the collusion to bring about agency pricing that was the subject of the DOJ case.

Graham

I thought it was the collusion to bring about agency pricing to raise prices that was the subject of the DOJ case?

[Graham]

Originally Posted by John F

I thought it was the collusion to bring about agency pricing to raise prices that was the subject of the DOJ case?

Yes; I should have been even more specific.

Graham

[John F]

Originally Posted by Graham

Yes; I should have been even more specific.

Graham

I didn't think your first post was necessary. At this point, it should be a given.

[Graham]

Originally Posted by John F

I didn't think your first post was necessary. At this point, it should be a given.

I agree, but with the comments above beginning with rkw's:

Few people realize this "Agency" model has been in place in our grocery stores for over a decade now

and

No matter the Agency model along with a court decision on MAP pricing has all but ended the "free market".

I feared we were about to go round the loop again.

Graham

[tubemonkey]

Originally Posted by Graham

I feared we were about to go round the loop again.

Let's do... the Agency Model is perfectly legal. So why all this fuss?

[John F]

Originally Posted by Graham

I agree, but with the comments above beginning with rkw's:



and



I feared we were about to go round the loop again.

Graham

Yup. I tend to just tune things out after a while.

[Andrew H.]

Originally Posted by rkw

exactly. Few people realize this "Agency" model has been in place in our grocery stores for over a decade now. Only they call it JIT (just in time purchasing) where everything on the shelf is basically on consignment.

Notice that major grocery stores no longer have night stalking crews to restock shelves? It's because the shelves are now stocked and maintained by the distributor for most everything in the store.

Prices too are not set directly by the store. Even sales are non-competing because the same vendor stocks the shelves in every store in town (I'm in a small town but we eat so there are 4-major and two minor groceries with a soon to be completed Walmart Superstore renovation adding a 5th major chain grocery. I'm not sure how Walmart handles their grocery though.

I live in a larger city with a lot of grocery stores, and I see quite a bit of difference in pricing even at stores within a mile of each other.