Did you notice that you can’t buy many Milwaukee power tools directly from Amazon? Back in November a contact for a major online distributor told us that Milwaukee tools decided to cut off Amazon completely from selling any of their tools.
At the time I thought maybe that Amazon wouldn’t sign a MAP agreement and that’s why they were cut off. This has happened before, most notably with PB Swiss tools.
A couple of weeks ago Orchard Supply Hardware, a chain of California-based home improvement stores, filed suit against Home Depot, Milwaukee, and Makita for creating an illegal boycott. Apparently Ace hardware’s 4,000 stores are also being locked out of buying and selling Milwaukee and Makita power tools. (Source, and antitrust case number 3:2012cv06361.)
Walk into any Home Depot, Lowes, or Sears stores and you will quickly see that each retailer excludes different brands from their shelves. Exclusivity agreements aren’t a new development.
Such a strict exclusivity arrangement is a great business move on Home Depot’s part, as long as it’s not deemed illegal by the court. But such an arrangement is bad for consumers. Milwaukee tools are popular, Makita tools as well but seemingly less so, and the arrangement should help funnel more customers to Home Depot. There must be some juicy incentives for Milwaukee and Makita for them to have agreed to such an arrangement.
I for one am frustrated that I can no longer purchase Milwaukee tools directly from Amazon. As I publicly responded to an email from Home Depot.com’s corporate team, I strongly prefer buying tools from Amazon over Home Depot, even if I’m not saving any money. If I lived in California, I would probably be even more frustrated to see Milwaukee and Makita tools absent from OSH stores as well.
It will be interesting to see how this all plays out. The suit was filed alleging that Home Depot, Milwaukee, and Makita are violating Title 15 Section 1 of United States Code (Sherman Antitrust Act):
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. (Source)
According to the Wikipedia, a [Title 15] Section 1 violation has three elements: 1) an agreement 2) which unreasonably restrains competition 3) and which affects interstate commerce.
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