> If company A improves their margins and can sell for a lower price, then company B has to either improve their margins, differentiate somehow or stop selling the product.
This comment implies that companies A and B are in direct competition.
The case you're now describing is a supplier/customer relationship. What we're talking about here is a Company C (Asus) having stores A and B as retail distribution customers.
Store A decides to undercut Store B's price. Store B says to Asus, I can't compete with those prices. So Asus has two options now.
-It can allow Store A to continue selling at whatever price it wants. Long term, this likely removes Store B as an Asus customer. Store A becomes a more and more important customer to Asus, and is able to demand additional wholesale price decreases in the future.
-Company C tells Store A, you need to maintain X price, so that both Store A and Store B can continue to sell our products.
Now imagine that Store A is a giant retailer like Amazon. If your interest is in protecting consumers and ensuring the long term competitiveness of the market, how do you achieve that by allowing the better funded player to sell at a cost that Store B can't match?
Further, Store A is notorious for low wages, and the health costs its workers incur in the physical nature of the job are socialized losses borne by the broader state. Store B may be "inefficient", but it pays its workers a better wage, spends in its local economy etc.
Lastly, we're talking about pretty commoditized markets here. If Asus's "price fixing" leads to higher priced mediocre laptops, consumers have hundreds of other options.
I appreciate you engaging in this discussion with me.
EDIT: Not to mention, unless Asus has some kind of wild brand loyalty in Europe that I'm unaware of, Store B is free to find a different laptop supplier if it finds Asus's terms unacceptable.
This doesn't change the fact however, that the antitrust considerations remain because Store A can likely beat Store B's prices on EVERY product.
I agree, I see I was wrong since store vs manufacturer is quite a different relationship than manufacturer vs manufacturer. I haven't thought that well so please ignore those confusing bits.
> Further, Store A is notorious for low wages, and the health costs its workers incur in the physical nature of the job are socialized losses borne by the broader state. Store B may be "inefficient", but it pays its workers a better wage, spends in its local economy etc.
This is a larger issue that IMHO should be solved independently, and I think the EU is doing quite well there compared to other parts of the world (I'm from Spain working in Japan now and I've heard way too many horror stories around here).
> How do you achieve that by allowing the better funded player to sell at a cost that Store B can't match?
Even if Amazon is better funded, they still need to make money per-sale (with few exceptions) so the prices won't be disproportionately different. And you can achieve that with differentiation in many ways, from the sales channels to the support, localization, etc. And that is the whole point, if Amazon innovates and everyone else is protected so they can stay behind then there would be no progress at all. They should be allowed to offer better prices if their processes allow for it and not be forced to sell more expensive because another company is very wasteful.
> The Commission found the manufacturers put pressure on ecommerce outlets who offered their products at low prices
So it is literally company A telling/forcing company B to sell at X price.