CONSUMER ALERT

MIKE COX
 ATTORNEY GENERAL

The Attorney General provides Consumer Alerts to inform the public of unfair, misleading or deceptive business practices, and to provide information and guidance on other issues of concern.

Hey! Why Isn't That Price Fixing?
Or
The Real Story of Manufacturer's Suggested Retail Prices.

The Attorney General's Consumer Protection Division receives many inquiries about price fixing on a variety of products, from appliances and home stereo equipment to toys and health care products. A typical question is: "I was shopping for stereo speakers lately and the brand I like is priced exactly the same at every store. When I asked one of the sales clerks about it, he said the store won't reduce the price any lower because it would be below the manufacturer's suggested retail price. Isn't that price fixing?

While the question may seem simple, the answers are complex and specific to every set of facts. Illegal price fixing may occur under a number of different scenarios:

• While the manufacturer may suggest a retail price, it cannot coerce the retailer into agreeing to it. If an agreement between the manufacturer and retailer is obtained, then the agreement is illegal.
  
• A number of different manufacturers may not agree to set prices for their products. Agreements between manufacturers to set prices are illegal.
  
• Similarly, a number of different retailers cannot agree to set prices for their products. Agreements between retailers to set prices are illegal.