StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Price Fixing Study: Recent FTC Ruling - Essay Example

Cite this document
Summary
In reviewing recent FTC rulings, a case similar to the situation in which we find ourselves, was reviewed. In this case, in particular, Nine West Group Inc.(here after NWG), who as you know is a leading supplier of women's footwear in the United States, recently settled a $34 million dollar overcharges complaint that it engaged in a retail price fixing scheme with retailers in certain sectors of the market…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.9% of users find it useful
Price Fixing Study: Recent FTC Ruling
Read Text Preview

Extract of sample "Price Fixing Study: Recent FTC Ruling"

RUNNING HEAD: PRICE FIXING STUDY Price Fixing Study: Recent FTC Ruling School Price Fixing Study: A Recent FTC Ruling In reviewing recent FTC rulings, a case similar to the situation in which we find ourselves, was reviewed. In this case, in particular, Nine West Group Inc.(here after NWG), who as you know is a leading supplier of women's footwear in the United States, recently settled a $34 million dollar overcharges complaint that it engaged in a retail price fixing scheme with retailers in certain sectors of the market.

This widespread case resulted in settlement both at the federal level with the FTC, but also on 56 individual states' charges lodged by their respective Attorney Generals. According to the FTC Report on this particular case, NWG maintained high prices for their various brands of shoes by illegally coercing retailers to sign agreements banning them from selling NWG's brands at reduced or on sale prices at alternate periods, thereby eliminating market competition and ensuring consumers would not benefit from price competitiveness among retailer contrary to USC 15 Chapter 2.. As found in the FTC complaint "Nine West divisions entered into agreements with retailers that fixed retail prices for their shoes and restricted promotion periods - called 'clearance windows' - when retailers could promote sales or sell shoes at reduced prices" (NWG, 2000, screen 1).

Through brand name recognition the shoes produced and distributed by Nine West are highly marketable to the buying public. Some of the brand names Nine West producers their women's footwear under include: "Nine West, Amalfi, Bandolino, 9 & Co., Calico, Easy Spirit, Evan-Picone, Pappagallo, Capezio, cK/Calvin Klein, Selby, Joyce, Westies, and Enzo Angiolini" (NWG, 2000, screen 1). Due to the high demand of these brands by the consumer, individual retailers were pressured by Nine West to conform to their pricing scheme or face penalties or suspension of further shipments.

By using this method of price fixing, Nine West forced retailers to knowingly violate anti-trust laws. The suit contends that even those retailers who initially resisted the imposed pricing plan and limited price reduction periods allowed by NWC were forced to communicate to NWC that they would abide by the set policy. This was achieved through the above method of refusal to supply additional stock until the retailer in question agreed to maintain the artificially high prices. To that end, the official FTC complaint stated "Nine West's practices artificially propped up the prices of Nine West products and restricted competition among retailers who sold Nine West brands in violation of federal law" (NWG, 2000, screen 1).

This, in effect, resulted in artificially high prices passed on to the consumer for purchase of these various brands of highly popular ladies footwear. In settling this particular case, NWG, although not admitting guilt, agreed to three main provisions in all future business dealings. Firstly, it delineates that NWG may NOT require set prices which retailers must abide by in any phase of their marketing of NWG products including advertising, promotions, sales or clearance. Secondly, NWG is banned from attaching stipulations which link the retail pricing of their product to any form of pressure or coercion aimed at retailers.

Lastly, NWG is barred from "notifying dealers in advance that they are subject to a temporary or partial suspension of supply if they sell Nine West shoes below a designated price" (NWG, 2000, screen 1). Enforcement of the above stipulations will be assured by several means. All NWG price lists are required to contain a written disclaimer that the right to set pricing for resale of all NWG products is set by the individual retailer and the FTC will monitor pricing practices of NWG through auditing.

The final ruling by the Commission was 5-0 in favor of the judgment although it appears we should further investigate the Colgate Doctrine (see Onkyo U.S.A. Corp., 122 F.T.C. 325, 326, n.3) which may afford us some protection.References"Nine west settles state and federal price fixing charges." (March 6, 2000). Federal Trade Commission Website. File No. 981-0386. Accessed March 8, 2006 from http://www.ftc.gov/opa/2000/03/ninewest.htmOnkyo U.S.A. Corp., 122 F.T.C. 325, 326USC 15

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Price Fixing Study: Recent FTC Ruling Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Price Fixing Study: Recent FTC Ruling Essay Example | Topics and Well Written Essays - 500 words. Retrieved from https://studentshare.org/miscellaneous/1507230-price-fixing-study-recent-ftc-ruling
(Price Fixing Study: Recent FTC Ruling Essay Example | Topics and Well Written Essays - 500 Words)
Price Fixing Study: Recent FTC Ruling Essay Example | Topics and Well Written Essays - 500 Words. https://studentshare.org/miscellaneous/1507230-price-fixing-study-recent-ftc-ruling.
“Price Fixing Study: Recent FTC Ruling Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/miscellaneous/1507230-price-fixing-study-recent-ftc-ruling.
  • Cited: 0 times

CHECK THESE SAMPLES OF Price Fixing Study: Recent FTC Ruling

Legal and Social Implications of Eden Group Joint Venture

In this paper, there are a number of implications that often arise whenever changes occur in ownership of businesses, with a case study of some Serbian multinationals like the Eden Brewery.... In our case study, we undertake to look at the legal and social aspects that arise with respect to the above strategies, considering multinationals like Pancevo, Eden Group of Companies, EBG and others that operate in the Asian market and other countries (Richmond, & Turton, 2000, p....
8 Pages (2000 words) Case Study

Colgate Palmolive Company

After the detailed study of the company's brands and their influence on the markets, some conclusions have been made regarding the study.... The paper "Colgate Palmolive Company" describes that Colgate is currently using all of the world's best marketing and manufacturing techniques for its products but there are still some of the actions that should be taken by the company to further enhance its performance in the world markets....
9 Pages (2250 words) Case Study

The Impact of Foreign Exchange Exposure Retail into Company-Sainsbury Supermarket

The study first of all is aimed at carrying out an analysis of the impact of foreign exchange exposure on a United Kingdom UK based retail company-Sainsbury Supermarket.... Bodie et al (2002) state that the international economic environment might affect a firm's export prospects, the price competition it faces from competitors, or the profits it makes on investments abroad.... This is because oil price declines since last august and generally benign global financial conditions have helped to limit spillovers from the corrections in the US housing market and to contain inflation pressures....
12 Pages (3000 words) Case Study

Next Plc's Marketing Strategy

Next plc is a major company dealing in retail fashion clothing and is based in Leicester, UK that has nearly 440 stores in the UK and Ireland.... It has more than 100 franchise stores operating in the rest of the world.... The company trades on the London stock exchange and has had annual sales of $5490 million as of 2006....
23 Pages (5750 words) Case Study

Issues in Competitive Advantage: The Computer Industry

he industry is highly price-sensitive and organizations operate in an environment of low margins.... The author of the paper titled "Issues in Competitive Advantage: The Computer Industry" examines and analyzes the major challenges that Apple faces which include competition from free software, its sales and distribution channels, and customer service....
10 Pages (2500 words) Case Study

Foundations of Change Management

he recent war on terrorism however is one of the most critical factors which are considered as one of the valid threats to the political stability within the country.... The study "Foundations of Change Management" analyzes the example of overcoming most of emerging problems, since the organizations often face the difficult tasks of managing change which, in most of the cases, is considered as one of the most challenging tasks which need to be performed....
6 Pages (1500 words) Case Study

Diagnosis from a Multi Frame Perspective

Furthermore, the recent economic downturn in the U.... According to recent statistics, countries such as Germany, France, Spain etc have increased their exports substantially while American companies are battling for survival.... This paper “Diagnosis from a Multi-Frame Perspective” seeks to study, analyze and evaluate the various aspects of such a strategy through the case study of General Motors – one of the leading automakers in the U....
10 Pages (2500 words) Case Study

Savile Group Analysis

At one time this center was ruling 75% of the market with two other big players and their way of competing for market share was providing innovative prices but since the recent entrance of two new volume recruiters, the market share is suffering drastically.... This case study "Savile Group Analysis" represents the on-going problems in the market caused by rising competition while there is a massive amount in the recession of jobs available for outplacement.... rom the problems defined from both research and the case study, it is clear that the main focus of the Savile group should be towards creating market awareness, interacting with the public and the employees....
7 Pages (1750 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us