Monday, May 13, 2024

No Longer Even Pretending

Those in power cheat. It was ever thus. But in the past, they at least pretended that they did not. These days, they have become entitled and emboldened to the point that they celebrate their corrupt behavior. 

With the excuse of supply chain disruption and inflation, and under the current environment of "regulatory capture", vendors have cheerfully begun to price gouge even more than their already outrageous cash grabs. We have become so used to vendor corrupted entities like the CRTC, Canada Competition Bureau, and other regulatory bodies that we no longer fight it. The gang-members running things cheerfully go about managing their corrupt operations, largely in the open. It's business as usual. 

For me, this all hits home recently with three examples where I should have been able to expect some protection from the CRTC (mobile price gouging), the CPSO (physician misbehavior), and the Competition Bureau (crazy price-fixing).  The one that triggered this: I could use a replacement of a failing part in my furnace that for now just makes an annoying noise, but the service guy who was just here tells me it will fail. When I asked how much it would cost to replace he chuckled and said "a lot -- we'll send you a quote". In a reasonable marketplace this is a part that might be a hundred bucks at Canadian Tire. I will try to update when I get a price, but one assembly I saw at the manufacturer's site costs thousands of dollars for the part alone. Update: price: about $1607+$150+228.41 tax=$1985.41

Historical collusion like the early 20th-century light bulb manufacturers' pricing conspiracy mirrors today's practices, where companies, ostensibly within legal bounds, manipulate market prices. Consider the Minimum Advertised Price (MAP) policy openly published by Bradley Corp. (https://www.bradleycorp.com/map) and others—this isn’t about competition; it's about control. Such policies, while technically legal, carry the whiff of old-school price fixing, demonstrating that the powerful often do not even pretend to play fair. As we encounter bafflingly high prices for simple items like furnace parts, it's clear: the game is rigged.
Once upon a time we bought things like appliances with an expectation that they would be reliable, maintainable and likely outlive us. These days, vendors create things that require ongoing payment through things like outrageously ongoing 'supplies' and expensive replacement parts, or even just ongoing subscriptions for the right to use what has already been purchased. This state of affairs is punitive, wasteful, and only beneficial to a few people none of us even like. 
It's out of scope for this post, but fixing the issues raised here require us all to set our differences aside and get politically active.

Below is a snippet of my conversation with ChatGPT about the legality of this obvious price-fixing. 

User

How can a Minimum Advertised Price policy be legal?

ChatGPT

A Minimum Advertised Price (MAP) policy is legal primarily because it is considered a unilateral action by manufacturers or suppliers to set the lowest prices that retailers can advertise for their products. It does not set the actual sale price—customers may still purchase products at lower prices, but these prices cannot be advertised.

The legality of MAP policies stems from their compliance with antitrust laws under certain conditions. They must be structured and enforced in a way that does not lead to price fixing or restrain trade in an anti-competitive manner. For instance, a manufacturer can suggest retail prices but cannot conspire with retailers or other manufacturers to set prices, as that could be considered illegal price fixing.

U.S. courts, including the Supreme Court, have judged the legality of these policies under the rule of reason, assessing whether they promote or harm competition. MAP policies are often defended on grounds that they allow small retailers to compete with larger ones by protecting margins, encouraging service quality, and facilitating fair competition based on factors other than price.

However, these policies are scrutinized and can be challenged if they are used in ways that seem to restrain trade unreasonably or lead to anti-competitive practices. The key is ensuring they are implemented in a way that is justifiable from a competition standpoint.

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