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I represent an established network marketing (MLM) company that
markets health and nutritional products. While distributors are free
to advertise prices in yellow pages, classified ads, etc., the home
office has introduced an internet policy that specify the shopping cart
area of a distributor's website must be "password protected"...so a casual
surfer cannot freely compare one distributor's prices with another.
Apparently, some large distributors don't want to lose their customers
to distributors charging lower prices on the web, so they pushed through
this new policy.
In order to be considered an "independent contractors", the manufacturer
specifies only "suggested retail", "suggested wholesale" prices, etc. to it's
distributors, who can charge whatever price they choose. Distributors
sell to other distributors (bound by a mutual contract) and to the general
public (no contract or signup fee required).
Forcing a potential customer to contact a web distributor, obtain a
password, and then go back to the site to find the prices seems
anti-competitive.
The question is, can a manufacturer legally prohibit an independent
contractor from displaying prices for products freely available to the
public on a website?
Thanks!
Jim
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I represent an established network marketing (MLM) company that
markets health and nutritional products. While distributors are free
to advertise prices in yellow pages, classified ads, etc., the home
office has introduced an internet policy that specify the shopping cart
area of a distributor's website must be "password protected"...so a casual
surfer cannot freely compare one distributor's prices with another.
Apparently, some large distributors don't want to lose their customers
to distributors charging lower prices on the web, so they pushed through
this new policy.
In order to be considered an "independent contractors", the manufacturer
specifies only "suggested retail", "suggested wholesale" prices, etc. to
it's
distributors, who can charge whatever price they choose. Distributors
sell to other distributors (bound by a mutual contract) and to the general
public (no contract or signup fee required).
Forcing a potential customer to contact a web distributor, obtain a
password, and then go back to the site to find the prices seems
anti-competitive.
The question is, can a manufacturer legally prohibit an independent
contractor from displaying prices for products freely available to the
public on a website?
I'm not in that field, so this is just a layman's view, but that sounds like
a conspiracy in restraint of trade. Regardless of whether you are a
competitor with the lower prices or a distributor who is being expected to
join the conspiracy, I suggest you see an attorney experienced in anti-trust
actions.
McGyver
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Jim <johnson11012000@hotmail.com> wrote in message news:<402299C7.1EBC63BF@hotmail.com>...
I represent an established network marketing (MLM) company that
markets health and nutritional products. While distributors are free
to advertise prices in yellow pages, classified ads, etc., the home
office has introduced an internet policy that specify the shopping cart
area of a distributor's website must be "password protected"...so a casual
surfer cannot freely compare one distributor's prices with another....
The question is, can a manufacturer legally prohibit an independent
contractor from displaying prices for products freely available to the
public on a website?
Probably yes. Manufacturers have much latitude in controlling how
their distributors market their products, and it is good business for
them to establish and enforce policies to that end. If the mfr. had
monopoly power or something close to it, and was using the policy to
fix prices, there might be restraint-of-trade issues; if the dists.
could not advertise prices but had to issue quotes in response to
inquiries, there might be free-speech issues. But except in those
boundary cases your alternatives are generally to comply with the
mfr's policies or carry a different mfr's line instead.
--
Not a lawyer,
Chris Green
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Christopher,
That's exactly it. The manufacturer wants us to issue quotes in
response to inquiries. Yet distributors can openly advertise prices
in any other medium, except the internet. For example, I can go
on the radio and sell the products for any price I want. Or, I
can place a newspaper ad and sell everything at wholesale if I
want. But they're trying to restrict us from showing our prices on
the internet...unless a potential customer first obtains a password.
(Imagine visiting amazon.com and having to get a password
before you could see the price of a book).
Jim
Christopher Green wrote:
if the dists.
could not advertise prices but had to issue quotes in response to
inquiries, there might be free-speech issues. But except in those
boundary cases your alternatives are generally to comply with the
mfr's policies or carry a different mfr's line instead.
--
Not a lawyer,
Chris Green
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