Talk:Net Book Agreement

From Wikipedia, the free encyclopedia

the irony is, that the NBA from what i understand from reading the FTCs website would not be illegal here in the us

"Q: I own a small jewelry store and the manufacturer of TimeCo brand watches recently dropped me as a dealer. I’m sure it’s because my competitors complained that I sell below the suggested retail price. The explanation was the manufacturer’s policy: its products should not be sold below the suggested retail price, and dealers who do not comply are subject to termination. Is it legal for the manufacturer to dictate my prices?

A: The law allows a manufacturer to have a policy that its dealers should sell a product above a certain minimum price, and to terminate dealers that do not honor that policy. Manufacturers may choose to adopt this kind of policy because it encourages dealers to provide full customer service and prevents other dealers, who may not provide full service, from taking away customers and "free riding" on the services provided by other dealers. If TimeCo got you to agree to maintain the suggested retail price, it would be illegal. It also would be illegal if TimeCo agreed with your competitors to drop you as a dealer to help maintain a price to which they had agreed. However, a complaint from a competing retailer is not sufficient to prove such an agreement, because the manufacturer may have decided independently that its interests were better served by sticking with its policy. "