Price Comparison and Price Fixing

[johnn]

Hi,

I'm thinking about creating a price comparison website not sure if it's legal. A site such as bizrate or mysimon has been on the web for some time - do they have legal problems? What they are doing are perfectly legal, aren't they?

Thanks,
John

[ccDan]

Are you creating a web site strictly being used for price comparisons (and reviews, info, etc.) on widgets, and you're not selling the widgets yourself?

If that's the case, I don't think you have to worry about "price fixing". You'd have to be collaborating with competitors in order to be accused of price fixing. Though, be warned that, from what I understand, they're real sensitive about price fixing these days and even just talking to a competitor about pricing can land you in trouble.

As for as creating a comparison web site, whether or not you're selling the stuff yourself, you do want to indicate the date (and maybe even time) that you last checked the price. Especially if you sell widgets yourself and are trying to show you have the best price. Taking a screenshot might be a good idea as well. You want that so that if a competitor complains, you can say that that was the correct pricing at the time you checked it.

And, you'll want that protection whether you're selling the widgets yourself or not.

Granted, I'm not a lawyer and there may be other issues involved, but these are the ones I've heard about. I'm sure others will chime in with others.

[mgream]

Price comparison is good for competition: it's just the specific circumstances where the comparison may not be objective, or may be misleading, or may cause people to start co-ordinating prices (e.g. competitors raise prices in response to changes by other competitors). One would think that making prices lower as a result of the comparison would be a good thing though. If you are not dealing in the goods yourself, it is safer, but not an absolute requirement (e.g. it is fair to use competitors products and pricing as objective advertising for your own goods). If the competitors start to use your system to co-ordinate their prices, then I think you'd be immune: you're just the objective guy in the middle (so long as you can prove it ...) and you can't be responsible for how people actually use the information from your system. As you say, the presence of existing systems suggests that it acceptable practice. If you are going to do something, you really need to spend some time fleshing out all of the issues, and obtaining professional advice - anything less than this is just too risky.

[rogerd]

I agree with mgream about getting professional advice... I think if you are going to do this, you really need to dot the "i"s and cross the "t"s, i.e., acknowledge all trademarks, describe the circumstances under which the price was obtained (date, source, options, etc.), etc.

Dell rose to prominence by mocking Compaq, so it CAN work... but be careful! Good luck!

[johnn]

Thanks. Yeah, it's always good to seek pro advice. Yeah, I don't sell anything - just compare prices of products from merchants - that's all.

[PCInk]

Your user profile does not state which country you are from. Legal advice given may not apply, depending on where you are from.

I've heard that in Germany you cannot (or could not) use a competitors price in any advertising. I don't know if it was ever true, but a German shopping comparison site may need more checking out for legal status than an UK or US one.

The other problem you have is the updates of prices. I find dealtime and kelkoo to often have the incorrect price. Or the merchants supply a feed where the carriage is stated as free - you go to the shop and they want £4.99 carriage! That could land you in legal problems, possibly.

[Leosghost]

It's a very bad idea to try this in France ( or on Frenchserver ) too ...there is a law expressly forbidding it in the "interests of better competition and consumer choice "!

I swear thats the literal translation of the phrase ...

The big telecom boys and some *bay Clones are doing it anyway here even on TV ....but they got more lawyers than dogs got fleas..

And one of them owns the most watched TV channel :)

[johnn]

I'm from USA.

[rogerd]

If you go forward with this project, be sure to include plenty of disclaimers about prices being subject to change, having to verify pricing, specifications, and terms with the merchant, not being responsible for errors, etc. You don't want to get caught in some kind of messy dispute where someone purchased a product on your "advice" and ended up with a different product or higher price.

[johnn]

Thanks for your advice Rogerd, you're great! :)