ee163agb@sdccs7.UUCP (02/29/84)
<- bug snack There has been some discussion of pricing computer equipment, both here and in net.micro.apple, especially with regard to student discount prices on the Apple Mac. Basically the question is "can a dealer price a piece of equipment below list?" This is followed by the companion question "can a firm (like Apple) make special arrangements to sell their machines below list to schools/students?" [The following discussion is based largely upon California law, and Federal law under the Ninth Circuit. Most States should have similar rules. Words I use below should NOT be understood like lawyer talk unless specially noted.] A wholesaler must give relatively equitable prices to everybody. Variations in (wholesale) price must be based upon some reasonable consideration (volume discounts, for example, are okay if available to all, and not clearly unreasonable), or enjoy some classic exemption, like student discounts. Thus (question #2 above) university discounts on the Mac are okay. A list price is a *retail* price, "suggested" by the wholesaler of a product to the retailers. In the computer business the wholesaler is often the original manufacturer. Due to anti-trust sorts of legislation, the wholesaler is forbidden to make the retailer sell the product to the public for a specified price, whether by requiring the retailer to sign a contract to that effect, or by refusing to sell goods to retailers that step out of line. Once a retailer has purchased some good from a wholesaler, he is free to set whatever price to the public that he desires. Thus (question #1 above) selling at less than list is okay. Now, there are lots of reasons why wholesalers/manufacturers want to force a certain retail price for their equipment. The classic one has to do with the pressure from retailers who wish to maintain a large profit margin--they don't want price competition. As they can't lawfully prevent others from entering the retail business, they want the newcomers forced to adhere to the high price. This is bad for the consumer, though, so we get laws like those described above, making such (bad word here, but convenient) "syndication" unlawful. The tactic in vogue lately for computer makers to circumvent the spirit of the laws and fix prices has been the "authorized dealer" covenant. The computer maker announces that "customer service" is an integral part of his product, and that only retailers who provide the right kind of service will be authorized dealers, and be eligible to purchase and resell the product. Anyone who tries then, to sell the product for less than list (consistently) is removed from the authorized dealer list for alleged service incompetence. This tactic is especially successful against low-overhead mail-order dealers, who are making profits from discounted merchandise as big as those that storefront operators are making from list price. Mail-order dealers clearly don't provide the kind of customer service (and education, et cetera) that walk-in businesses do! Lately, I have learned of an even sneakier tactic, which I do not know whether or not has been tested in court. The computer maker requires retailers to sign a contract which explicitly notes that the maker may not set retail prices (other than *suggesting* a list price), and then goes on to require, however, that the retailer NOT **ADVERTISE** any price less than list, under heavy contractual and tort penalties. This, clearly, is designed to discourage competition. First, it discourages a retailer from setting a discount price--he's free to do so, but since he can't TELL anyone about it, there's no point. (This produces some of those "call for price" ads that you see in the paper, I think.) Second, it discourages customers from going to a discount retailer to buy their computer (and thus making other dealers match that price to retain their clientel), because they won't KNOW there's a discount dealer in town. Absent knowing that they can save two hundred bucks by driving half an hour to wherever, they'll stay with the nice computer store up the street at list price! I don't wish to make it appear that only computer manufacturers engage in these abusive practices: all businesses do. The fact that these kind of conspiracies are common, though, doesn't make them any less rotten. ___________________________________________________ On 13th Amendment (no slavery) as a defense to the draft, leaving aside the fact that the argument has never worked (the Court will not hold military service to be the sort of servitude contemplated by the Amendment), draft *registration* (as opposed to actual selective service levys) can clearly be found constitutional under the congressional power to regulate the militia, which was not superceded or revoked by the 13th Amendment. Besides, the legislative history will show that the framers of the 13th amendment did not intend to bar a draft, and had indeed been largely responsible for implementing the first one during the Rebellion. ^ / \ | | ----Note that the above is my assessment of the legal situation, not my sympathies. In spite of which [above], I think that the Court *ought to* find that the selective service constitutes unconstitutional involuntary service under the 13th Amend., as well as a taking of "life, limb, and property" without due process of law (5th and 14th Amends.) There is plenty of precedential ammunition for the Court [sorry, I just realized that I've been indulging my habit of referring to the Supreme Court of the United States as just "the Court"] to find new rights in old Amendments--the punishment should fit the times--so it wouldn't be that- all hard, *stare decisis*-wise. As a matter of policy, I think conscripts make lousy soldiers, and do a dishonor to the supposedly free and republican country that this is. I think that our soldiers should be volunteers, or else militiamen called up for actual wars, invasions, or insurrections, as the Constitution provides. whew, I talk too much. bookmark {noscvax,ucbvax}!sdcsvax!sdccs7!ee163agb