Babies R Us Accused Of Price Fixing [Price Fixing]

Babies R Us Accused Of Price Fixing [Price Fixing]

via Consumerist by Chris Walters on 7/22/09

If you feel like had to pay too much for baby supplies this past decade, look to Babies R Us. Time reports that last week, "the U.S. District Court in Philadelphia granted class-action status to a complaint that Babies 'R' Us coerced manufacturers of high-end strollers, car seats, high chairs, strap carriers and breast pumps into preventing Internet retailers from discounting their products."

The basic charge is that from 2001 to 2006, Babies R Us forced manufacturers to disallow online retailers from discounting their products, so that the brick and mortar chain could price competitively without having to take a loss.

If they resisted, Babies "R" Us threatened to cut off the manufacturers, according to the suit, and refuse to sell their products in Babies "R" Us stores. Since Babies "R" Us sold 30% to 50% of these companies' products, Medela, which is based in Switzerland, and other brands like BabyBjörn, the Swedish strapmaker, and Maclaren, the strollermaker based in the U.K., had no real choice but to go along.

According to the judge, one manufacturer named in the suit said, "It's hard to say no when they [Babies R Us] have over 50% of our business!"

Although nobody is disputing that Babies R Us took a hard line with manufacturers and either withheld or threatened to cancel orders if they offered Internet retailers discounts, that's not necessarily illegal anymore.

In 2007 the Supreme Court overturned a nearly century-old ruling that used to make these types of pricing deals inherently illegal. Now such practices must be evaluated under "the rule of reason." For the plaintiffs to win, anticompetitive effects of the minimum-pricing agreement between the manufacturer and retailer must outweigh the pro-competitive effects.

Time notes that although it can be hard to prove this, there's some evidence that sales for the manufacturers actually decreased during this time period. The case will likely go to trial in 2010.

"Did Babies "R" Us Gouge Mommy and Daddy?" [Time]
(Photo of the cutest baby ever: TedsBlog)

Scientists Agree: Denny's Is Dangerous [Sodium]

Scientists Agree: Denny's Is Dangerous [Sodium]

via Consumerist by Carey on 7/25/09

Denny's entrees are loaded with dangerous amounts of salt, according to a class action suit filed by the Center for Science in the Public Interest. The CDC recommends consuming no more than 1,500 milligrams of sodium each day, but some Denny's entrees contain a whopping 5,500 milligrams.

No Denny's dish contain less than 500 milligrams of sodium, and 75% of them contain more than the maximum recommended allowance, including:

• Moons Over My Hammy, a ham, egg, and cheese sandwich, has 2,580 mg of sodium by itself-more than even a healthy young person should consume in a day. It's served with hash browns (adding 650 mg of sodium) or grits (an additional 840 mg).
• The Super Bird sandwich, served with regular French fries, has 2,610 mg of sodium-more than twice what someone with high blood pressure should consume in a day.
• Denny's Meat Lover's Scramble, which has two eggs with chopped bacon, diced ham, crumbled sausage, Cheddar cheese, plus two bacon strips, two sausage links, hash browns, and two pancakes has 5,690 mg sodium, or 379 percent of the advised daily limit.
• A full meal at Denny's consisting of a bowl of clam chowder, a Spicy Buffalo Chicken Melt, and a side of seasoned fries contains an alarmingly high 6,700 mg of sodium. It's a big meal, to be sure, with about 1,700 calories. But that's more sodium than what 70 percent of Americans should consume in four and a half days.

Ew!

Denny's: Public Health Enemy # 1 [Consumer Law & Policy Blog]
(Photo: oddharmonic)