Photograph by Maura Teague
“Price discrimination” is flexible pricing for the same product or service based on particular customers’ circumstances. The same product will have different prices, say, for “business users” or “students,” for “early birds” and the rest of us, for the indigent and the wealthier clientele.
Do you have a problem with that? How about nearly identical versions of a product, sold as “Plain,” “Sterling,” and “Platinum Elite” at progressively higher prices and steeply higher profit margins? How about a $6 can of soup at eye-level on the supermarket shelf and an identical can of soup for $3 on a lower shelf? How about charging internet users money for access to a file that is available elsewhere on the internet for free? Should any of these practices be illegal? Which of these practices is immoral? Which is dishonest (if any)?
When should the government step in? When does such commercial conduct rise to the level of fraud? Or “unjust enrichment”?
I do not presume to know the answers to these questions, which go to the heart of free markets and government regulation. “How much profit is too much profit?” “How rich is too rich?” “When should the government step in an shut down a business because no rational consumer would buy its products?” (You might be too young to remember Pet Rocks.)
I will follow Larson v. Per Mar Security & Research Corp., a proposed class action recently removed to U.S. District Court (D. Minn.) from Dakota County District Court (Minn.). The basic allegations are that Defendant Per Mar Security & Research Corp. overcharged its customers. We will see how this case plays out. Over time, my sense of the case may change, but my first impression is that consumers who buy supposedly over-priced goods or services should not then be able to sue the seller solely on the basis of the excessive price. That is not what our court system is for. That is what our market system is for.