Many eBay sellers are familiar with the dreaded VeRO notice or other communication from a manufacturer demanding that they remove legitimate product from eBay or simply refuse to continue supplying their products to the merchant. Ongoing cases include L’Oreal who in France won a court order banning four brands entirely from eBay along with a €38m fine.
The argument put forward and upheld in a US court decision is that specialist retailers provide additional services to enable the consumer to make an informed decision which simply isn’t provided by Internet merchants. By allowing the same products to be sold online undercutting high street retailers, consumers can purchase at the best possible price having researched the product at a traditional retailer.
Retailers simply can’t afford to provide highly knowledgeable staff to assist consumers with their choices simply to lose the sale when the buyer goes online to make their purchase. In the Leegin Decision (.pdf document), the US courts decided that this would be the end of high-end retailers and decided that minimum price fixing across retail stores and the Internet wouldn’t break price fixing (or as it’s know in the US antitrust) legislation.
I’ve yet to see any hard evidence to support this theory and frankly it sounds like a great excuse made up by retailers wanting to control distribution of their product and shun a free market.
eBay testified at the US congress petitioning against the court ruling and issued a statement saying “Threatened by the surge of online competition, mega-retailers have unleashed teams of lawyers and lobbyists and used price fixing as a tool to squash competitors”
Very simply many of these cases are simply about protecting uncompetitive commercial practices at the expense of consumer choice. In the US not all the Supreme Court Justices agreed with the ruling and one went so far as to say “The only safe predictions to make about today’s [The Leegin] decision are that it will likely raise the price of goods at retail”.
It’s good to see eBay petitioning against such rulings. Each time a retailer wins a verdict to allow price fixing or restrict the availability of their products on eBay or on the Internet in general the only losers are online merchants and the consumer.
Have you had a manufacturer restrict your ability to sell online? If so let us know in comments below. If you’ve had a restriction overturned it would be great to hear how you persuaded the manufacturer to allow the sale of their products online (or how you evaded any potential restrictions).
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