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Note that some of these approaches are not legal in the EU and rules in the markets for some products such as TVs that discussion of MSRPs or RRPs (Recommended

Note that some of these approaches are not legal in the EU and rules in the markets for some products such as TVs that discussion of MSRPs or RRPs (Recommended Retail Prices) can be an indication of price fixing. ERPs (estimated retail prices) need to be used for internal forecasting ideally gathered from respectable information services such as GfK and if the ERPs were all €x99 that would be suspicious. Routinely asking retailers what prices they were selling at could be grounds for an investigation. One approach sometimes taken (although I suspect not by Apple) is that if one retailer discounts the product the manufacturer supports other retailers to match the discount. This is illegal in the EU as it acts as a deterrent to any discounting as it will get the initial discounter no benefit (market share still ends up shared but they unlike their competitors have to pay the cost of the discount). Despite this Apple maintain tight control of the prices probably by thin retailer margins with money made up by accessory sales and probably some support/discount/payments for retailers who display Apple products according to their guidelines. It is allowable to offer different terms for different types of retailer e.g. dedicated Apple store, store with dedicated area with demo units complying to guidelines or online although it should be non-discriminatory in that any company that sets up to comply with the terms should be allowed.

dazzawazza 14y ago
So are you saying that Apple is breaking the law or that the article is wrong?
- josephlord 14y ago
  I have no proof of either. The article may be completely correct about the US approach and their European approach may be different and legal and/or they may be treading very carefully in the EU with high quality legal advice. Also I believe there are (but can't quickly find reference to) special categories of products in the EU with stricter rules than the general ones and that this includes TVs (the product I have experience of at Sony) so some of the practices I mentioned as illegal for TVs may in fact be legal for laptops and tablets. I am insufficiently expert in EU competition law to know the exact limits but did have enough information to know a few key things not to do and when things were getting near enough the limit that it was time to check with a lawyer. I did support discussions with expensive outside lawyers with product information about what products could be put into categories that were not offered to every retailer (only those that fulfilled conditions around presentation and demonstration). My main warning is that you have to tread carefully in these areas particularly in the EU and get good legal advice (which I'm sure Apple has).
  - dazzawazza 14y ago
    OK, thanks.
- accountoftheday 14y ago
  It is quite possible that Apple is, technically, breaking EU law but the Commission are letting them get away with it because they have more important things to deal with. With no consumer outrage and no real local competitor to protect from a foreign predator there is no political gain from action. However competition law applies uniformly across the EU so it is easy to comply with, if you choose so. A more complex situation exists with Facebook. To follow a variety of applicable national and state law they would have to an extraordinarily large amount of legal resources familiar with the respective intricacies and probably create national variations of their product. This is the kind of thing that holds back European companies but in this case it protects FB, because the Commission (the only institution with enough political clout and resources to take action) is only going to address EU-wide issues, not a bag of a dozen different issues. So it is rational for FB to mostly ignore the law, which in reality they chose to do.
gws 14y ago
Indeed in the EU a manufacturer can impose on its distributors a maximum resell price to consumers but absolutely no minimum price. "Price maintenance" is an antitrust offence in the EU, any attempt by a large manufacturer to prevent consumer prices from being lower is an offence. Still Apple prices in the EU are the same everywhere just as in the US, i always wondered how they manage to accomplish that
- josephlord 14y ago
  > Still Apple prices in the EU are the same everywhere just as in the US, i always wondered how they manage to accomplish that If I had to guess I would say near zero margins and fixed payments for each store with display areas meeting display requirements for design, size, placement in store, network connectivity, device set up, trained demonstrator availability, product ranging and possibly even store location. The rest would come from accessory sales. You can get away with a lot of terms when customers come into shops looking for an iPad or Macbook rather than just a tablet or a computer. I imagine there may be minimum sales numbers to get the fixed payments but that the profit would come from the fixed payments and the accessories rather than any margin on the devices themselves.
- rsynnott 14y ago
  > Still Apple prices in the EU are the same everywhere just as in the US, i always wondered how they manage to accomplish that Retailers occasionally sell Apple products under RRP here.
randomafrican 14y ago
Isnt also illegal to sell at a loss in The EU ? If Apple sets its wholesale price high enough, price won't get too low.

dazzawazza 14y ago

So are you saying that Apple is breaking the law or that the article is wrong?

josephlord 14y ago
I have no proof of either. The article may be completely correct about the US approach and their European approach may be different and legal and/or they may be treading very carefully in the EU with high quality legal advice. Also I believe there are (but can't quickly find reference to) special categories of products in the EU with stricter rules than the general ones and that this includes TVs (the product I have experience of at Sony) so some of the practices I mentioned as illegal for TVs may in fact be legal for laptops and tablets. I am insufficiently expert in EU competition law to know the exact limits but did have enough information to know a few key things not to do and when things were getting near enough the limit that it was time to check with a lawyer. I did support discussions with expensive outside lawyers with product information about what products could be put into categories that were not offered to every retailer (only those that fulfilled conditions around presentation and demonstration). My main warning is that you have to tread carefully in these areas particularly in the EU and get good legal advice (which I'm sure Apple has).
- dazzawazza 14y ago
  OK, thanks.
accountoftheday 14y ago
It is quite possible that Apple is, technically, breaking EU law but the Commission are letting them get away with it because they have more important things to deal with. With no consumer outrage and no real local competitor to protect from a foreign predator there is no political gain from action. However competition law applies uniformly across the EU so it is easy to comply with, if you choose so. A more complex situation exists with Facebook. To follow a variety of applicable national and state law they would have to an extraordinarily large amount of legal resources familiar with the respective intricacies and probably create national variations of their product. This is the kind of thing that holds back European companies but in this case it protects FB, because the Commission (the only institution with enough political clout and resources to take action) is only going to address EU-wide issues, not a bag of a dozen different issues. So it is rational for FB to mostly ignore the law, which in reality they chose to do.

gws 14y ago

Indeed in the EU a manufacturer can impose on its distributors a maximum resell price to consumers but absolutely no minimum price. "Price maintenance" is an antitrust offence in the EU, any attempt by a large manufacturer to prevent consumer prices from being lower is an offence. Still Apple prices in the EU are the same everywhere just as in the US, i always wondered how they manage to accomplish that

josephlord 14y ago
> Still Apple prices in the EU are the same everywhere just as in the US, i always wondered how they manage to accomplish that If I had to guess I would say near zero margins and fixed payments for each store with display areas meeting display requirements for design, size, placement in store, network connectivity, device set up, trained demonstrator availability, product ranging and possibly even store location. The rest would come from accessory sales. You can get away with a lot of terms when customers come into shops looking for an iPad or Macbook rather than just a tablet or a computer. I imagine there may be minimum sales numbers to get the fixed payments but that the profit would come from the fixed payments and the accessories rather than any margin on the devices themselves.
rsynnott 14y ago
> Still Apple prices in the EU are the same everywhere just as in the US, i always wondered how they manage to accomplish that Retailers occasionally sell Apple products under RRP here.

randomafrican 14y ago

Isnt also illegal to sell at a loss in The EU ? If Apple sets its wholesale price high enough, price won't get too low.