4 ms·

Right. Selling below marginal cost can trigger these laws. But how do these two concepts interact? If someone is price dumping, and I cut off supply to them,

by cepth 8y ago

Right. Selling below marginal cost can trigger these laws. But how do these two concepts interact? If someone is price dumping, and I cut off supply to them, are we both in violation of the law?

nerbert 8y ago
In the EU you can't force someone to sell at a specific price, you can only recommend a price. Also you can't dump price and those are two separate things.
kalleboo 8y ago
> If someone is price dumping, and I cut off supply to them, are we both in violation of the law? Probably, yes. Price dumping laws are there to protect other resellers, not the brand image or whatever they were going for here, so the OEM doesn't have any stake in a price dumping case.
- cepth 8y ago
  I think it's an interesting question whether an OEM has a vested interest in a price dumping case. If you are a multi-channel retailer, like ASUS is, where you're selling through physical and online channels, if a large retailer like Amazon decides to cut the final sale price of your goods, this definitely has a cascading effect on your other business relationships. In particular, your physical distribution customers are going to wonder how Amazon is able to sell for such a low price, and may pressure you to offer them a better wholesale price. We may hope that the threat of EU enforcement dissuades an Amazon-type retailer from this type of price dumping/cutting, however by the time the law is actually enforced, you (the manufacturer) may have already suffered irreparable damage to your business relationships with your other customers, and may have suffered a permanent hit to the margins you can make. In a situation like that, I'm having trouble seeing why it would be unreasonable to stop selling to that price-cutting retailer, particularly if they are a player with entrenched market power.
  - jdietrich 8y ago
    >In a situation like that, I'm having trouble seeing why it would be unreasonable to stop selling to that price-cutting retailer, particularly if they are a player with entrenched market power. If they're acting illegally you should apply for an injunction, but you would have a reasonable defence if you decided to cut off their supply. Your intent in cutting off supply wasn't to make the market less competitive, but to prevent an abuse of the market.

by cepth 8y ago

Right. Selling below marginal cost can trigger these laws. But how do these two concepts interact? If someone is price dumping, and I cut off supply to them, are we both in violation of the law?

nerbert 8y ago

In the EU you can't force someone to sell at a specific price, you can only recommend a price. Also you can't dump price and those are two separate things.

kalleboo 8y ago

> If someone is price dumping, and I cut off supply to them, are we both in violation of the law? Probably, yes. Price dumping laws are there to protect other resellers, not the brand image or whatever they were going for here, so the OEM doesn't have any stake in a price dumping case.

cepth 8y ago
I think it's an interesting question whether an OEM has a vested interest in a price dumping case. If you are a multi-channel retailer, like ASUS is, where you're selling through physical and online channels, if a large retailer like Amazon decides to cut the final sale price of your goods, this definitely has a cascading effect on your other business relationships. In particular, your physical distribution customers are going to wonder how Amazon is able to sell for such a low price, and may pressure you to offer them a better wholesale price. We may hope that the threat of EU enforcement dissuades an Amazon-type retailer from this type of price dumping/cutting, however by the time the law is actually enforced, you (the manufacturer) may have already suffered irreparable damage to your business relationships with your other customers, and may have suffered a permanent hit to the margins you can make. In a situation like that, I'm having trouble seeing why it would be unreasonable to stop selling to that price-cutting retailer, particularly if they are a player with entrenched market power.
- jdietrich 8y ago
  >In a situation like that, I'm having trouble seeing why it would be unreasonable to stop selling to that price-cutting retailer, particularly if they are a player with entrenched market power. If they're acting illegally you should apply for an injunction, but you would have a reasonable defence if you decided to cut off their supply. Your intent in cutting off supply wasn't to make the market less competitive, but to prevent an abuse of the market.