Class-Action Lawsuit Accuses the Archery Industry of Price Fixing

A proposed class-action lawsuit filed in federal court last week is accusing the archery industry of colluding to fix prices of products at all levels.
The suit, which was filed May 30 in U.S. District Court in Utah, names big-box store retailers like Bass Pro Shops, bowmakers like Mathews, and the Archery Trade Association for conspiring 'to fix the prices of — and eliminate price discounting and competition for — archery products.' The suit was first reported by Reuters on Monday.
The 63-page lawsuit hinges on a policy known as Minimum Advertised Pricing, or MAP. Many archery companies and outdoor retailers won't sell their archery equipment, particularly compound bows, for less than a certain amount. If a bow shop undercuts agreed upon prices, manufacturers can — and have — enforced their MAP policies by revoking a shop's authorized dealer status for their brand. The lawsuit accuses the ATA of a 'campaign to artificially raise prices through MAP policies.'
MAP policies grew from a need to combat online retail giants like Amazon. The global retailer began undercutting brick and mortar shops by selling products at discount, and without the previously included advice and bow servicing that local sporting goods stores offered customers for free when they purchased equipment.
For example, flagship bows from top companies like Mathews, Hoyt, PSE, Bowtech, and others are not sold online. So if you want to purchase the new Mathews, you must show up in person at an authorized dealer. Usually, your local bow shop won't sell you a new bow below the MAP. While there, however, you'll have the opportunity to test-shoot bows and have a bow technician set up your bow properly. If new top bows were to be sold online and shipped directly to your home, industry insiders agree that local bow shops would be doomed.
In recent years there's also been a rise in knock-off companies ripping off the design and packaging of top archery products, then selling them at discounted prices online. Customers would think they were buying a brand's top-tier broadheads, but actually receive a cheaper Chinese-made product. Warranty claims began to increase, and archery companies found themselves dealing with quality control and brand degradation. MAP policies were designed to help address this.
MAP is a complicated issue, according to industry insiders, but such practices are legal when executed correctly and do not qualify as price fixing as defined by the Federal Trade Commission. The key distinction is that price fixing usually occurs between competitors, while MAP pricing occurs throughout the entire industry.
'MAP is generally legal if it's implemented unilaterally by the manufacturer,' says one former archery industry insider, who asked not to be identified due to the pending litigation. 'Price fixing is when competitors agree to a fixed price. And of course, a manufacturer and a retailer aren't competitors: one is a supplier, one is the seller.'
The key, they emphasize, is 'unilaterally.' That means a manufacturer cannot favor one shop or distributor by offering one better pricing. Meanwhile, as e-commerce sales of low-priced and knock-off archery products continued to grow, bow manufacturers and accessory makers looked for an industry-wide solution. To protect their brand values and the industry itself, many companies began implementing MAP policies.
'MAP was completely legal,' the source says. 'No one was suggesting retailers fix prices and force consumers to buy X product at Z price. That never happened and never would have happened. And obviously retailers wouldn't have agreed to it. Retailers want the ability to do things their own way.'
Another consideration is that price fixing is often done secretly — because it's illegal. MAP policies are widely publicized by everyone from the ATA to individual manufacturers. (You can find Bowtech's MAP policy here.) One key allegation the lawsuit may be seeking to prove, however, is that the industry tried to enforce not just the advertised price, but the sales price of archery equipment.
'Do I think there's price fixing? No, I've never participated in it. I know that I have dealers sell way below MAP in their store, but they do not advertise that way. And that is their decision. That is their store. I cannot dictate what they sell it for,' said one bow company executive who was not authorized by their legal team to speak publicly about the lawsuit. 'It's a slippery slope because if there's no protection from an advertising standpoint, the big guys are gonna gobble up the small guys. There are shops in the country right now that sell Mathews at $50 to a $100 over cost so that they will sell every Mathews within a 150 mile radius and try to push the smaller guys out of business. I've been told that by big dealers. They don't advertise it but people just know they go in there, you know, they're gonna pay $50 to a hundred over as opposed to $350 to $400 over. So if they could start advertising on what they want and there's nothing we could do, it would drive half the shops in this country out of business.'
Because ATA is a non-profit organization, its records are subject to public records requests. The lawsuit is packed with excerpts of these statements that are intended to bolster the price-fixing argument. Here are a few examples:
'These coordinated MAPs have benefited the industry collectively, allowing retailers and distributors to 'strive for a minimum of 40% profit,' according to the industry trade association National Archery Buyers Association ('NABA'). As one Archery Products retailer observed, 'Every dealer I have ever talked to thinks everything in archery is overpriced today, just as I do . . . . [I]s archery overpriced, absolutely.'
'The ATA explained that 'MAP . . .policies help retailers stay in tune with the market and margin expectations. In other words, if you understand and follow a manufacturer's MAP policy, you'll be better positioned to make more money and run a successful business.'
The suit is brought by plaintiff Joseph Santarlas from Delaware County, Pennsylvania, 'on behalf of himself and all others similarly situated.' In other words, anyone who has bought the archery products referenced in the suit. Santarlas was working Friday and was not immediately available for comment when reached by phone.
None of the eight attorneys who signed their names to the lawsuit have replied to Outdoor Life's repeated requests for comment this week. Four different firms, with offices in California, Washington D.C., New York, and Pennsylvania, are listed as counsel for the plaintiff. Most of the firms specialize in antitrust and class-action lawsuits.
One industry insider noted that the defendants named in the suit are all larger companies with deeper pockets that might be able to settle such a lawsuit before ever reaching court. Smaller manufacturers and mom-and-pop bow shops are not named. The lawsuit names:
Hoyt
Bowtech
Mathews
PSE
Cabela's
Dick's
Bass Pro Shop
Jay's Sporting Goods
Kinsey's Outdoors
Lancaster Archery Supply
Archery Trade Association
Two software companies that helped companies track MAP pricing
Most companies listed in the lawsuit, including Bass Pro Shops, did not return requests for comment or declined to comment to OL. The Archery Trade Association also did not return a call for comment, but issued a brief public statement via email on Friday shortly after OL reached out.
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'The Archery Trade Association has learned of a recently filed lawsuit against the ATA and a group of archery manufacturers, distributors and retailers,' reads the statement. 'The complaint seeks relief related to Minimum Advertised Pricing (MAP) policies dating back more than a decade. The ATA is in the process of preparing an appropriate response to the complaint and looks forward to a swift and favorable conclusion to this matter.'
Scott Einsmann contributed reporting.

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