[Phsstpok]

No, restricting the prices that a reseller can sell a product that they have already purchased from the manufacturer or wholesaler is illegal price fixing.

See the court cases between 42nd Street Photo and IBM and Apple in the mid 80s. IBM and Apple lost, though 42nd St. photo ended up getting nailed for criminal violations in some of the scams they put together to get around IBM and Apples other pricing set ups (both had their own discounts to sell to schools, 42nd st photo set up a Hassidic "school" with no students, but tons of Apple and IBM PCs at the discount and then resold them through their stores).

The key is that the manufacturer had sold the items already. They can control the price only if they retain ownership until the retail sale. That's why it has to be and unwritten agreement. It's illegal.

[On the Road to Serfdom]

It is not illegal.

In one sense you are right. Ping cannot make a contract that says you must charge this price and if you don't you will pay us $50 damages per sale. That could not be enforced. Once the store buys the clubs from Ping they have the legal right to sell them at any price they want.

Ping did not try that kind of contract. Ping said basically if you sell our clubs below our specified price we will never ship you anymore clubs. That is legal.