Why would it be illegal to give them a discount? I understand not wanting to undermine the relationship with the other vendors, but illegal?
Discounts are fine.Companies collaborating with each other to fix prices is not. Price Fixing per the FTC [ftc.gov]:
Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors to raise, lower, maintain, or stabilize prices or price levels. Generally, the antitrust laws require that each company establish prices and other competitive terms on its own, without agreeing with a competitor.
It's the difference between "let's do a discount" and "let's always be cheaper for this product anywhere, but only on this platform"
Just answering your literal question rather than advocating for whether this is right or wrong:
The 1936 Robinson-Patman Act "prohibits price discrimination, preventing sellers from charging different prices to different buyers for goods of 'like grade and quality' if it harms competition."
In a world where regulators do their job, this should have been a giant flag that a thorough investigation into Amazon's practices were warranted. Because I'd expect for every nintendo, there were 100 others who bent over.
Why would it be illegal to give them a discount? I understand not wanting to undermine the relationship with the other vendors, but illegal?
Discounts are fine.Companies collaborating with each other to fix prices is not. Price Fixing per the FTC [ftc.gov] :
Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors to raise, lower, maintain, or stabilize prices or price levels. Generally, the antitrust laws require that each company establish prices and other competitive terms on its own, without agreeing with a competitor.
It's the difference between "let's do a discount" and "let's always be cheaper for this product anywhere, but only on this platform"
The 1936 Robinson-Patman Act "prohibits price discrimination, preventing sellers from charging different prices to different buyers for goods of 'like grade and quality' if it harms competition."
It's extremely rarely enforced, but ... there you go. You can read more at https://en.wikipedia.org/wiki/... [wikipedia.org]
For anyone wondering, Fils-Aimé is referring to the 2001 Wal Mart is Da Bomb bill, which clearly states that no retailer is allowed to beat Wal Mart prices.