Price maintenance
Fixed prices exist when the seller of goods or services is required by law or a contract with a third party to agree a certain price for his service .
General
Price maintenance is a means that is used in many countries to prevent price competition . The goals can be quality assurance of goods or the form of distribution, the possibility of cross-subsidies or a reduced incentive to buy. In some cases, low prices are prescribed in connection with a subsidy granted . A price maintenance limited in time is called a price moratorium .
The price can be set either by the manufacturer , by associations of all suppliers, or by the state. In states organized according to a planned economy , prices are usually set by the state.
In addition to the price fixings prescribed by the state, there are also price fixings contractually agreed between manufacturer and dealer . They are called vertical or second hand price maintenance . Such agreements are often prohibited because they impede competition between retailers .
Sometimes a de facto fixed price also arises for recommended sales prices ( recommended retail prices ) if pressure is exerted to keep them. Price recommendations that manufacturers want to enforce by refusing to deliver to unwilling dealers, for example, are generally not tolerated (although the number of unreported cases is unknown).
Problems of state price regulation
The following problem can arise from a state price fixing if the fixed price is too low: For suppliers of goods, the production of the goods becomes uneconomical. Instead of the government's goal of enforcing a low price for end consumers, the supply will therefore become scarcer or even disappear entirely. The goods are still available on the black market , but at a higher price due to the market economy .
In contrast, if the price is set above the market level, it is worthwhile to illegally import the affected products from lower-priced national territories, i.e. smuggling .
Price maintenance has been tried many times - and in vain - throughout history. Examples:
- On May 4, 1793, the French Welfare Committee set a maximum price for grain in the Small Maximum Act in order to counteract a supply crisis.
- In the 1970s, the dollar lost a lot of its value because the US lived beyond its means ( Vietnam War , Apollo program , nuclear and conventional armaments in the Cold War). In 1971, US President Richard Nixon tried in vain to stop inflation by fixing the prices of goods and salaries (more in the article Nixon shock ).
Price maintenance in Germany
In the Weimar Republic an institution was created on December 10, 1931, the head of which was Carl Friedrich Goerdeler "Reich Commissioner for Price Monitoring".
At the time of National Socialism there was a Reich Commissioner for Price Determination from 1936 (sometimes also called "Reich Commissioner for Price Monitoring"). (Law on the appointment of a Reich Commissioner for Pricing of October 29, 1936)
A ban on vertical price fixing in Germany was already discussed in the 1960s. In Germany, with the amendment to the Act against Restraints of Competition (GWB) on January 1, 1974, fixed prices were declared fundamentally inadmissible; previously they were the rule for branded goods . Sections 4 to 17 GWB were omitted in later versions .
In 1999, the Federal Court of Justice (BGH) prohibited the rental company Sixt from making binding prices for its franchisees. Sixt AG has around 200 branches in Germany and also has so-called franchise agreements with 13 independent companies. The concessionaires are integrated into Sixt's reservation system and it was contractually recommended that they accept the prices published by Sixt. If they did not follow the "recommendation", they were asked to return the order placed by Sixt to the company. The Munich Higher Regional Court had already ruled this contract in 1997 as inadmissible price maintenance. In response to the appeal filed by Sixt, the cartel panel of the BGH confirmed the Munich ruling in all essential points. The reasoning stated that the prohibition of fixed prices also applies in principle to franchise relationships. The regulation of Sixt AG, however, represented a circumvention of this prohibition in violation of antitrust law. Although there is no express agreement in the contracts to accept the Sixt prices, the franchisees were in fact forced to do so.
Exceptions to the ban on fixed prices
In Germany, however, certain goods and services are exempt from the prohibition of fixed prices or requirements, in particular in Section 30 GWB. They can be made subject to fixed prices:
- Publications such as books, music, maps and "Buchsubstitute" as e-books (statutory book prices )
- Newspapers and magazines, provided the publisher concludes corresponding fixed price agreements with the wholesalers ( press wholesalers )
- Tobacco products such as cigarettes , cigars , cigarillos (defined in the Tobacco Tax Act)
- Transport fees for most taxi rides (are usually made mandatory in Germany by the municipality)
- Rent in social housing (there is no price control in the strict sense of the word , as the deviation below the cost rent does not violate any regulation)
- Prescription drugs (provisional)
Further examples
- In Great Britain, Edward Heath (1963/1964 President of the Trade Authority and Minister for Industry, Trade and Regional Development) under Prime Minister Alec Douglas-Home in 1963/1964 abolished price control in trade.
- For several years, Amazon told its retailers not to sell their products cheaper anywhere else. Amazon only gave up this practice when the Cartel Office took action.
- Booking.com used a clause according to which the room rate on the hotel's website could not be lower than the offer on the booking portal until the cartel office intervened.
See also
Individual evidence
- ^ Mareike Walter: The fixed price of the second hand . In: Max Planck Institute for Foreign and International Private Law (Ed.): Studies on Foreign and International Private Law (StudIPR) . No. 389 . Mohr Siebeck, Tübingen 2017, ISBN 978-3-16-155330-1 , p. 399 .
- ↑ Live with fixed prices. In: zeit.de. April 17, 1964. Retrieved March 22, 2017 .
- ↑ http://www.tagesspiegel.de/wirtschaft/preisbichtung-fuer-franchisenehmer-ist-gefallen/70570.html
- ↑ ECJ stops price fixing of prescription drugs. In: Zeit Online . October 19, 2016. Retrieved October 28, 2018 .
- ↑ Internet, discount pharmacy, drugstore: Alternative sales channels for drugs. (No longer available online.) In: Consumer Center . August 9, 2016, archived from the original on October 19, 2016 ; accessed on October 28, 2018 .
- ↑ heise online: Price parity: Cartel Office closes proceedings against Amazon. Retrieved February 8, 2017 .
- ↑ Cartel Senate negotiates Booking.com's best price clauses . In: FAZ (Ed.): Frankfurter Allgemeine Zeitung . February 8, 2017, ISSN 0174-4909 ( archive.org ). Cartel Senate negotiates Booking.com's best price clauses ( Memento of the original from February 8, 2017 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
