In a shocking decision today, the Supreme Court ruled 5-4 to no longer have price floors for manufacturers, ending the 96-year-old rule.
The previous rule made it unlawful for manufacturer’s and distributors to set a minimum retail price on their products.
The five judges who ruled in favor of the lifting the ban said that this would result in better competition and service.
But with the new rule in place today, it’ll be quite some time before we see any significant changes in price. And whether you knew it or not, there have been some price floors already set in the marketplace by companies, such as Apple.
Apple, all these years has been helping to set a price floor by using a MAP, or minimum advertised price, strategy to help sell their products such as the Mac and iPod. What they do is they as they have the reseller or store keep prices at or above the suggested minimum advertised price. If the store complies, Apple would give them money to help them advertise. If a store’s price goes below the MAP, then Apple can withhold that advertising fund.
Although it isn’t illegal, it was the closest thing to a price floor that manufacturers were allowed to set. Sony employs the same strategy on some of their products as well.
But now with the price floor rule gone, it’ll be interesting to see how companies go about setting their new prices.
Source: The New York Times, Slate.com
for 12 hours straight.
something new.
I don’t know what 
