rxe said:This judgement is a good thing, anti competitive pricing is illegal in the EU and for good reason. If Festool appeal, hopefully they will lose, and then get a load of costs handed to them. IMO, the penalties for a company wantonly breaking the law should be much bigger.
I think many people here are confusing two issues.
Firstly, there is the price that Festool charge the dealer for the tool. The judgement has no effect on that at all, Festool can charge whatever they want. So the idea that this will mean that Festool start having to make rubbish is misguided. DeWalt make rubbish because they choose to, not because they have to.
Secondly, there is the margin that the dealer makes on the sale. This judgement prevents Festool from mandating the margin. A dealer will be free to sell at whatever price they want to - full margin, razor thin margins, or even negative margins if they are doing promotions. If a dealer is efficient, and moves a lot of stock, they can choose to run thin margins. This is good for the dealer and good for the customer - and presumably good for Festool as they will sell more tools.
The people who will suffer under this regime are the small dealers, who don't shift much stock, and have to charge full margins to cover their costs. So it is down to a trade off: do I (who orders online, and has never set foot in a dealer) have to pay inflated prices to support a dealer service that I don't want? I think not. In the 21st century, why should I pay a middle man to have a shop, run a warehouse, pay staff ... so that I can physically go and fetch some goods? That's a bit 18th century.
Now, there is nothing stopping the majority of Festool users saying "I'd rather pay full margin for my tools in order to support my dealer". If they do that, all is good, and they have the choice to do that. However, I would imagine that many people, when they actually have to "pay" for the service, will choose not to.
This isn't just Festool, the same thing seems to be happening to Stihl, which again is a good thing.
I disagree, this is not anti-competative at all. If there was collusion between multiple vendors to say that no drill will be sold in the UK under a certain price, then that would be anti-competative. If anything, from what I can tell this is competitive all around. No one is stopping anyone from buying a $20 drill if they want one so the consumer is good, and since all the dealers were charging the same they have to compete on service not price which means Festool consumers win.
If they have to compete on price you will end up with less dealers since the only ones that will be selling will be those on the lowest margins which means that many dealers will drop the line since they won't be able to make the profit they need to carrying them. Eventually that leaves only the big volume dealers who will start putting price pressure on Festool who then can't just say no because they will have a greatly reduced dealer base to sell to. Rather then taking the hit to their profit margin Festool will be forced to reduce the quality of product to maintain their margins.
This is exactly what happened to DeWalt, Stanley and Porter Cable with Home Depot and Lowes here in the US and has proven to be horrible for everyone involved, ironically including Home Depot and Lowes whose power tool sales have been hurting for years because of quality issues...
I just don't see this being a good thing for anyone in the long term. In the short term you'll get some deals but give it a year or two for the repercussions to hit...
-Jim