More Dealer Termination

1
More Dealer Termination

• Sharp Electronics MSRP rival dealer complained
  of discounting/gave ultimatum to fire or I quit
  handling the line
• 30 days later Pl is terminated
• Jury verdict for Pl based on per se instruction
• Since no agreement with surviving dealer to hold
  price, use Rule of Reason
• Majority distinguish Klors as being horizontal
  Was there free riding?
• Was there agreement? Cf. Hawaiian Oke

2
Vertically Imposed Territorial or Customer
Restraints

• Exclusive territory exclusive dealership
  location clause customer limits (resale to
  discounter sale to mega-customer)
• From White Motor (R of R for non-price) to
  Schwinn (per se for territorial) back to GTE
  Sylvania (Rule of Reason if non-price)
• Schwinn conceded R of R for consignments
• GTE location clause to strengthen interbrand
  comp. since losing mkt share

3
Manufacturers Motives for Vertical Restraints

• Point of Sale Service (pre demo, image, customer
  edu post warranty maint)
• Better margins to push line (interbrand)
• Eliminate free-riding on local brand-name
  advertising
• Safety (Tripoli v. Wella)
• Greater expertise for mega-customers
• Efficient delivery some dlr. protection