Bike companies halt ad deals to settle antitrust complaint

July 02, 1992|By Mensah Dean | Mensah Dean,Staff Writer

Two major bicycle manufacturers have agreed to discontinue advertising promotions that might violate Maryland antitrust laws.

Schwinn Bicycle Co. of Chicago and Trek Bicycle Corp. of Wisconsin have agreed separately with Maryland Attorney General J. Joseph Curran Jr. to display in any advertisement sponsored by the companies specific disclaimers regarding the way they price their bicycles.

The problem concerns the companies' practice of asking more than one dealer to advertise their products at a certain price. If each had asked only one dealer, that would not have been a violation, said Robert N. McDonald, an assistant attorney general.

The agreement, in effect, means that the bicycle manufacturers must discontinue the practice of asking Maryland dealers to advertise their products jointly at a specified price.

Mr. Curran alleges that the companies "implicitly agreed" with several dealers on the price that bicycles and other related products would be advertised for sale. That violates the state's antitrust law, he said.

Because the manufacturers engaged in "maximum price fixing agreements" and did not set a lowest price that could be charged, consumers did not suffer monetary damages, and no damages against Schwinn or Trek were sought by the attorney general, Mr. McDonald said.

Representatives of Schwinn and Trek did not return phone calls seeking comment yesterday.

The dealers apparently went along with the manufacturers' requests because the cost of ads was shared by the manufacturers and the dealers, Mr. McDonald said.

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