Manufacturer s setting of minimum resale price for dealers
68 F.T.C. 1268 · date not parsed · Digest No. 5
source volume section (68 F.T.C. 1268)
Text is machine-OCR of the printed volume and may contain errors. Advisory opinions are the Commission's views on proposed conduct, not binding orders.
No. 5. Manufacturer s setting of minimum resale price for dealers. An advisory opinion made public today by the Federal Trade Commission notified a manufacturer that, in the circumstances presented its establishment of a minimum resale price for its dealers would constitute unlawful price-fixing.
The facts related to the Commission by the manufacturer are these. It has three dealers in one city who submit bids for the husiness of one large consumer. Initially there was enough margin between the manufacturer s list price and the net price to the dealer to aUow them to submit competitive bids. However, as competition between the deal- ADVISORY OPINION DIGESTS 1269 ers increased, the bid price became lower and lower until now the situation is that none or the three dealers can realize a profit on this business.
They have asked the manufacturer if it can do anything about the situation. One dealer suggested that the manufacturer should go on record as establishing a minimum price below which no dealer can quote. This limit would be in the form of a percentage below list or an actual doUar figure below list. The manufacturer stated to the Commission that this limit wil assure the dealer receiving the order of a fair profit for his efIort and would not destroy competition between the dealers, who would apparently be left free to compete above the minimum. The manufacturer asked if this can be done legally and if it would have the right to compel dealers to comply with this established limit (File No. 6537054 , released 1\0. 1965.