Does not make price discrimination necessarily illegal. Price differences or different terms of sale are allowed under two conditions :
1. the price differential is given in good faith to meet a price offered by a competitor
2. the price differential is based upon cost savings reflecting a difference in the
cost of manufacture, sale, or delivery resulting from the differing methods or
quantities in which products are sold or delivered
price reductions based on volume ordered, closeout sales, lower shipping costs,good-faith meeting of competition, and lower commissions paid by the seller to its employee salespeople are generally allowable. All these defenses can justify a differ-ence in price or terms of sale.For legal protection,however,sellers firm to reduce prices or terms of sale to certain customers. Price discrimination laws are particularly applicable to business-to-business sales (B2B),although business-to-consumer (B2C) marketers also could be found could be found culpable in a price discrimination suit.
The terms described in the following sections look at different behaviors associated with discrimination in the marketplace.
Collusion. When competitors conspire to set prices,agree to divide territories on a noncompetitive basis, or join together to act to the detriment of another competitor,they are practicing illegal collusion.
Does not make price discrimination necessarily illegal. Price differences or different terms of sale are allowed under two conditions :1. the price differential is given in good faith to meet a price offered by a competitor2. the price differential is based upon cost savings reflecting a difference in thecost of manufacture, sale, or delivery resulting from the differing methods or quantities in which products are sold or delivered price reductions based on volume ordered, closeout sales, lower shipping costs,good-faith meeting of competition, and lower commissions paid by the seller to its employee salespeople are generally allowable. All these defenses can justify a differ-ence in price or terms of sale.For legal protection,however,sellers firm to reduce prices or terms of sale to certain customers. Price discrimination laws are particularly applicable to business-to-business sales (B2B),although business-to-consumer (B2C) marketers also could be found could be found culpable in a price discrimination suit.The terms described in the following sections look at different behaviors associated with discrimination in the marketplace.Collusion. When competitors conspire to set prices,agree to divide territories on a noncompetitive basis, or join together to act to the detriment of another competitor,they are practicing illegal collusion.
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