Word: prices
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...that breast pump part of a widespread price-fixing conspiracy that protected the profits of Babies "R" Us, the country's dominant big-box baby retailer? According to a federal judge, it appears that could be the case. On July 15, the U.S. District Court in Philadelphia granted class-action status to a complaint that Babies "R" Us coerced manufacturers of high-end strollers, car seats, high chairs, strap carriers and breast pumps into preventing Internet retailers from discounting their products...
...Discounts - or Else! The dirty deal, according to the suit, was simple. From 2001 to 2006, Babies "R" Us told companies like Medela that they had to enforce resale-price maintenance - i.e., tell the Web retailers, who can more easily discount products since they avoid brick-and-mortar costs, to sell your products at X, or you'll cut off the supply. If they resisted, Babies "R" Us threatened to cut off the manufacturers, according to the suit, and refuse to sell their products in Babies "R" Us stores. Since Babies "R" Us sold 30% to 50% of these companies...
...Babies 'R' Us and other retailers know that consumers aren't going to put up with unfair trade restraints," says Trzupek, who joined the plaintiff class in 2006, when the suit was originally filed. The plaintiffs are pursuing an unspecified amount in damages; attorney Beth Fegan says the price agreements affected more than $500 million worth of baby products. (See the top 10 iPhone apps for dads...
...seats and high chairs; and Britax, which sells car seats and strollers - come across as weak accomplices in the scheme, which Brody distinctly labels a "conspiracy." For example, Brody writes that effective Feb. 1, 2000, "pursuant to the conspiracy, Regal Lager and BabyBjörn vigorously enforced resale-price maintenance against Internet retailers, gave BRU preferential treatment and stopped opening Internet accounts. During this period, BRU accounted for most of Regal Lager's business. Its founder, Bengt Lager, said about BRU, 'It's hard to say no when they have over 50% of our business...
...consumers, Brody's opinion notes that the plaintiffs "offered evidence that manufacturers had to pay for many services directly. Each manufacturer paid fees reimbursing BRU for advertisements and promotions." Further, the opinion notes that the defense's expert economist "indicated that BRU would maintain gift registries irrespective of resale price maintenance." In other words, Babies "R" Us wasn't responsible for pro-competitive benefits reaped from price deals. The judge's conclusion: "The defendants' argument may be rejected once again...