4 ms·

Read this: "PRICE DISCRIMINATION AND THE LAW" http://www.imakenews.com/strategicpricing/e_article000649775.cfm?x=b11,0,w http://www.imakenews.com/strategicprici

Read this: "PRICE DISCRIMINATION AND THE LAW" http://www.imakenews.com/strategicpricing/e_article000649775.cfm?x=b11,0,w http://www.imakenews.com/strategicpricing/e_article000649775...

jat850 16y ago
The article you linked specifies that the statute in question only applies to goods, not services. Is that applicable here?
- paraschopra 16y ago
  I am not a lawyer but I think it should apply to digital products. Perhaps not consultancy services, if you are offering a product, it should apply.
gregpilling 16y ago
To quote the article you linked to : "This complex, Depression-era legislation was enacted to protect small businesses by outlawing discriminatory price and promotional allowances obtained by large businesses. As is the case with the other antitrust laws, the Department of Justice, the FTC, and private parties may each bring Robinson-Patman cases, although the enforcement agencies have not focused on this area for some time. Indeed, the Justice Department has criminal powers in this area that have gone unused for many years, while the FTC today brings few significant cases in this area after being particularly active through the 1970s. Private suits on behalf of businesses (consumers have no standing to sue under the statute) account for most of the enforcement activity. Successful plaintiffs are entitled to the same remedies as those available under the antitrust laws (e.g injunctions, treble damages, attorneys’ fees and costs)." The article lists the very specific reasons a case may be brought, and the various defenses. I do not see how any of this is relevant to your argument that "charging different prices is illegal". I do however agree with your concept that you should try out different prices strategies. I have been amazed in my own experience when I make a package of my products priced beyond any shade of reason (from my view, as seller) and someone goes ahead and buys it. I had a manufacturing company and the 'big' package was to buy $1200 worth of goods and it was sometimes a tough sale. We tried a new 'big' package that was priced a little over $10,000 and it was an easier sale (to bigger customers). Lesson learned - don't ever think you know what the limits are until you test them. You might think that nobody would ever pay $100 per month for your widget, when some division of a Fortune 500 company would happily pay you a $1000 per month. Try it, you may be surprised.
btilly 16y ago
It refers to the Robinson-Patman act, about which you can find more information at http://en.wikipedia.org/wiki/Robinson%E2%80%93Patman_Act http://en.wikipedia.org/wiki/Robinson%E2%80%93Patman_Act including a link to the relevant statute at http://www.law.cornell.edu/uscode/15/13.html http://www.law.cornell.edu/uscode/15/13.html. My non-lawyerly reading says that you only need to worry if you're shipping physical goods for resale. And even then you have room to be OK as long as the price differences aren't creating a monopoly, and aren't enough to economically injure the people who receive a higher price.
mckoss 16y ago
Note that selling a product below its cost is required to break the law (aka "dumping"). I would assume this means below its "marginal" cost; which, for digital goods, is nearly zero.
rmc 16y ago
Interesting. That applies to USA. Is there any EU law on the matter?

Read this: "PRICE DISCRIMINATION AND THE LAW" http://www.imakenews.com/strategicpricing/e_article000649775.cfm?x=b11,0,w http://www.imakenews.com/strategicpricing/e_article000649775...

jat850 16y ago

The article you linked specifies that the statute in question only applies to goods, not services. Is that applicable here?

paraschopra 16y ago
I am not a lawyer but I think it should apply to digital products. Perhaps not consultancy services, if you are offering a product, it should apply.

gregpilling 16y ago

To quote the article you linked to : "This complex, Depression-era legislation was enacted to protect small businesses by outlawing discriminatory price and promotional allowances obtained by large businesses. As is the case with the other antitrust laws, the Department of Justice, the FTC, and private parties may each bring Robinson-Patman cases, although the enforcement agencies have not focused on this area for some time. Indeed, the Justice Department has criminal powers in this area that have gone unused for many years, while the FTC today brings few significant cases in this area after being particularly active through the 1970s. Private suits on behalf of businesses (consumers have no standing to sue under the statute) account for most of the enforcement activity. Successful plaintiffs are entitled to the same remedies as those available under the antitrust laws (e.g injunctions, treble damages, attorneys’ fees and costs)." The article lists the very specific reasons a case may be brought, and the various defenses. I do not see how any of this is relevant to your argument that "charging different prices is illegal". I do however agree with your concept that you should try out different prices strategies. I have been amazed in my own experience when I make a package of my products priced beyond any shade of reason (from my view, as seller) and someone goes ahead and buys it. I had a manufacturing company and the 'big' package was to buy $1200 worth of goods and it was sometimes a tough sale. We tried a new 'big' package that was priced a little over $10,000 and it was an easier sale (to bigger customers). Lesson learned - don't ever think you know what the limits are until you test them. You might think that nobody would ever pay $100 per month for your widget, when some division of a Fortune 500 company would happily pay you a $1000 per month. Try it, you may be surprised.

btilly 16y ago

It refers to the Robinson-Patman act, about which you can find more information at http://en.wikipedia.org/wiki/Robinson%E2%80%93Patman_Act http://en.wikipedia.org/wiki/Robinson%E2%80%93Patman_Act including a link to the relevant statute at http://www.law.cornell.edu/uscode/15/13.html http://www.law.cornell.edu/uscode/15/13.html. My non-lawyerly reading says that you only need to worry if you're shipping physical goods for resale. And even then you have room to be OK as long as the price differences aren't creating a monopoly, and aren't enough to economically injure the people who receive a higher price.

mckoss 16y ago

Note that selling a product below its cost is required to break the law (aka "dumping"). I would assume this means below its "marginal" cost; which, for digital goods, is nearly zero.

rmc 16y ago

Interesting. That applies to USA. Is there any EU law on the matter?