New York AG sues Tempur-Pedic over minimum pricing
Home & Textiles Today Staff -- Home Textiles Today, April 1, 2010
New York — The New York attorney general's office has accused Tempur-Pedic – manufacturer of memory foam mattress, pillows and accessories – of violating state law by enforcing minimum retail prices for its products.
In a lawsuit filed this week, the state said Tempur-Pedic unlawfully prohibits dealers from discounting, which has resulted in "uniformly high retail prices" and caused New York consumers to pay too much for its visco-elastic mattresses.
"Tempur-Pedic's retail partner agreement has contractual provisions that prohibit and restrain discounting, contrary to New York law," the complaint reads. "Moreover ... Tempur-Pedic has explicitly stated that it will not do business with any retailer that charges retail prices that differ from the prices set by Tempur-Pedic."
The complaint says Tempur-Pedic enforces the anti-discounting provision by, among other things, encouraging retailers to report competitors who are selling the company's products below the established price.
"Absent Tempur-Pedic's prohibition against discounting, New York retailers would set prices for Tempur-Pedic products according to the competitive conditions of a free market," the complaint said.
Tempur-Pedic ceo Mark Sarvary said the company was disappointed in the attorney general's action and noted the company had "cooperated fully" in a lengthy antitrust investigation by the attorney general's office.
"We believe the attorney general's claim that Tempur-Pedic violated state law is simply wrong, and we intend to defend the case vigorously," he said in a statement released by the company.
Sarvary said the attorney general's office had previously asked the company to consider discontinuing its retail price policy.
The lawsuit asks for an injunction barring Tempur-Pedic from enforcing the anti-discounting policy, and seeks restitution for consumers adversely affected by the practice.
Written by Larry Thomas of HTT sister publication Furniture Today
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