It's sorta like hiring highway robbers to make sure your bottom line stays up

It’s like piracy in reverse, or something. . .

From The Wallstreet Journal Online:

Tiny firms like NetEnforcers Inc. — with only 56 staffers jammed into a dim, spare cubicle farm here in Arizona — wield economic power far beyond their size. These companies scour hundreds of thousands of Web sites daily, looking for retailers offering bargains below the “minimum advertised price,” or MAP, set by manufacturers on an array of consumer goods.

This is technically ruled legal, especially in the case of “authorized dealers”, which are bound to honor MAP agreements as part of being “authorized”. Should it be legal? Here’s the brilliant, convincing defense:

Manufacturers say minimum-pricing requirements are good because they protect a brand’s image from being tarnished by discounting, while helping retailers make enough profit to pay for customer service. Consumer advocates argue that minimum-pricing deals hurt shoppers by keeping prices high and diminishing consumer choice.

I am quite sure that retailers need lots of help from manufacturers in figuring out what is best for them and their customers. Surely, without being bullied into it by manufacturers, retailers would never dream of offering customer service. And, though customers may not realize it, it is in their best interest to pay for image rather than product. And I do mean bullying. . .

If the seller isn’t an authorized dealer — for instance, a discounter that acquired the goods via a distributor — NetEnforcers says other tactics are used to try to force a lowball price off the Internet. In these cases, they can allege that the discounter’s use of the product’s name or image constitutes trademark or copyright infringement, in an effort to force the seller to stop listing the discount. . .They routinely use trademark-violation claims when asking eBay to take down sellers’ pages, “but it’s a bit unfairly enforced,” he says. “They take down the Web sites only of the unauthorized resellers that are selling at discounts,” but don’t bother other unauthorized sellers if they’re selling at MAP. This suggests manufacturers are mainly interested in keeping prices up, not preventing trademark violations. Mr. Cohen says.

Suggests? Really? Gee, d’ya think?

NetEnforcers swear they’re only rightfully concerned about the “intellectual copyright”:

NetEnforcers acknowledges that it uses the VERO program to remove violators of minimum-pricing terms, arguing that it’s an appropriate under the Digital Millennium Copyright Act, a 1998 law designed to help copyright-holders control access to digital copies of their works.

Doling out punishment for the wickedness of the discounters. . .

AceToolonline also says it raised its prices to match MAP. The online retailer’s president, Maria Polidoro, said her company was punished by Black & Decker for the violations. She says AceTool must forfeit some advertising funds from Black & Decker. As another part of the penalty, Black & Decker will also stop routing customers from its own Web site to AceToolonline for 30 days, Ms. Polidoro says.

For some odd reason, some people don’t like this whole deal, and they’re pushing for a legal ban against manufacturers from setting up minimum advertised prices.

Next time you see some awkward phrasing on a website about how they can’t show you the real price since it so low, and you’ll have to add it into your cart in order to see the price, you’ll know why. Using this method, they aren’t technically advertising their low price. If someone whacks you over the head with big stick every time you conduct business, you learn to do it a little more quietly, so as not to attract notice of the head-whacker.

Call me jaded, but it seems to me that every time people attempt market regulation, it usually just means a blossoming black market. If you declare all alcohol illegal, you don’t rid the world of alcohol. You merely turn a lot of people into criminals, who learn to drink a little quieter, sneak a little quicker, and make a lot of money off of bootleg liquor.

If you have to go through a lot of work to prop up your business model, the solution isn’t to get more people out there enforcing the rules you want to play by. Change your business model. It’s the idiot who defies the wind and tells it to blow somewhere else, because this is your yard, and so the wind has to play by your rules. It’s the genius who figures out how to harness the power of the wind and make a kabazillion dollars off of what the wind was just going to do anyway.

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