Antitrust Regulations: Online Retailers and Manufacturers Essay

Reflection paper

In their editorial, White, Aarons, and Chapman refer to the European Commission’s decision to investigate the claim that there is very little anti-trust integrity left in what accounts for the contractual relationships between online retailers and manufacturers. If this claim proves legitimate, it will most likely result in the Commission’s sub-sequential decision to impose additional anti-trust regulations in the domain of web-commerce: “It may become necessary for the commission to scrutinize certain clauses restricting online sales” (par. 2).

The purpose of such a hypothetical development would be to undermine the bargaining power of manufacturers. In its turn, this is expected to ensure the continued transparency of the competitive dynamics in the European online-market of goods and services – hence, benefiting price-sensitive consumers in Europe.

Before proceeding to discuss the actual effects of the initiative’s implementation on the fashion industry in the West, we need to highlight the discursive significance of some of the issue’s qualitative aspects.

One of them is that nowadays, manufacturers strive to charge ever-higher prices for their products and discourage retailers from selling these products online – the trend that appears dialectically/objectively predetermined. The logic behind this suggestion has to do with both: the fact the overwhelming majority of apparel manufacturers have their production lines operating in China, and the fact that the standards of living in this country continue to improve rather rapidly.¹

Whereas, as recent as twenty years ago, a Chinese worker would be more than happy being paid $1 per day for slaving in some ‘sweatshop’, he or she will now demand a much higher daily salary. What it means is that, as time goes on, the feasibility of the ‘outsourcing’ practice will continue being reduced. One of the strategies, deployed by the Chinese-based (but Western-owned) manufacturers to cope with this issue, is trying to prevent retailers from becoming a little too competitive and consequently capable of applying too much bargaining pressure on suppliers.

In other words, the concerned strategy, on the part of manufacturers, is fully consistent with the main principles of how the ‘free-market’ economy operates. Therefore, the Commission’s decision to interfere may only have a temporary effect, in the sense of disenfranchising manufacturers. The reason for this is that, despite the seemingly libertarian essence of the Commission’s initiative, it is politically driven and ultimately protectionist.

To illustrate the validity of this suggestion, one will need to refer to what has always been considered the societal role of fashion – to serve as the medium through which people channel their domination-seeking anxieties. As Hemphill and Suk noted:

Fashion is adopted by social elites for the purpose of demarcating themselves as a group from the lower classes. The lower classes inevitably admire and emulate the upper classes… Change in fashion is thus endlessly propelled by the drive to social stratification on the one hand and to social mobility on the other (1156).

In this respect, we will also need to mention yet another noteworthy trend that used to define the dynamics in the domain of fashion since the 20^th century’s early nineties until comparatively recent times – the growing popularity of the simultaneously ‘luxurious’ and ‘affordable’ fashion brands/clothing retailers, such as Zara, for example (Haejung, Soo-Kyung, and Forney 3).

The concerned development came about as a result of the fact that throughout the historical period in question, most Western countries were able to approach the point of being considered true ‘welfare-states’, which take pride in having most of their citizens belonging to the ‘middle class’. Those citizens who belong to the ‘underprivileged classes’ in these countries are also far from being required to struggle hard, in order to be able to survive physically.

After all, it is not a secret that even today, for as long as one is considered the EU subject, he or she does not have to work to be able to meet ends. While qualified to receive as much as 900 Euros a month in various ‘welfare payments’, an individual will be naturally prompted to indulge in bellyful idleness – especially if he or she happened to be a newly arrived immigrant from the Third World.

Such a situation, of course, created the objective preconditions for the boundary between the ‘high end’ and ‘low end’ trends/styles in fashion to grow increasingly blurred.² In its turn, the rise of the Internet contributed towards empowering Europeans (Westerners) as consumers, because it provided them with a number of the previously unknown bargaining opportunities (such as being able to shop online).

Nevertheless, the financial crisis of 2008, followed by the economic recession (which gains momentum, as we speak), and the process of Western countries continuing to weaken geopolitically, presupposes that the earlier described state of social affairs in the West is about to end. The reason for this has to do with the well-established fact that, to be sustainable, the Capitalist (free-trade) economy may never cease expanding territorially (Kiely 29). For example, the sharp rise of the ‘middle class’ in Western countries, which took place in the nineties, was made possible by the collapse of the USSR in 1991 – the occurrence that allowed the West to ‘devour’ most of the formerly Soviet markets.

As of today, however, there are no objective prerequisites to believe that the West will be able to maintain its socio-economic dominance in the world for much longer. America’s recent ‘successes’ in confronting Russia prove the validity of this suggestion. Consequently, this implies that there may soon be no ‘middle class’ left in the EU, to speak of. This, of course, presupposes a) The decline of the middle-class oriented fashion brands, b) The drastic reduction in the number of those Europeans who can afford to spend time hunting for fashion-bargains online, instead of indulging in heavy physical labor to make a daily living. After all, there is a good reason to think of one’s addiction to online shopping as being reflective of the clearly decadent workings of his or her psyche. As Fogel and Schneider pointed out:

Use of the Consumer Decision Making Styles Inventory (CDMSI) for online apparel purchases showed that recreational consciousness, impulsiveness, and decreased price-value consciousness were associated with the frequency of online shopping (369).

As time goes on, however, there will be fewer reasons for Europeans to be endowed with ‘recreational consciousness’.

Therefore, the European Commission’s anti-trust initiative, intended to bring more transparency to the functioning of the fashion market in Europe, and to reduce the severity of social tensions within the EU, is doomed to prove utterly ineffective. The reason for this is quite apparent – the Commission’s authority does extend to the countries where most manufacturers operate. If any restrictive measures are to be taken against manufacturers by the EU bureaucrats, the former will switch to targeting other markets – pure and simple. What it means is that the Commission’s initiative is purely declarative and that it cannot have any real effect on how manufacturers and retailers go about trying to remain competitive. However, the quoted editorial and the earlier deployed of the line of reasoning, on our part, do contain certain insights into what are going to become the fashion industry’s main operational principles in the future.

The most easily identifiable of them is that those fashion brands that specialize in providing consumers with ‘fashionable casual wear’ are going to fall out of favor with consumers. Such an eventual development is predetermined by the ongoing corporatization/privatization of the public sphere in the West – something that will inevitably contribute to the widening of a gap between the rich and poor. In its turn, this will deprive fashion of its current ability to serve as the instrument of social uplifting (even if purely imaginary) for the poor. Instead, fashion will become solely concerned with helping the rich to emphasize that they are much different from their impoverished co-citizens, even if this is being done in a clearly degenerative manner.³

The foremost effect of such a course of events on the online shoppers in Europe will be concerned with preventing these people from being able to purchase a low-priced and yet highly fashionable clothing item on the web. In fact, the prices will rise much higher even for the presumably unfashionable lines of clothing. This once again confirms the validity of the earlier suggestion that there can be very little factual significance to the European Commission’s anti-trust initiative, mentioned in the editorial.

Endnotes

Works Cited

Fogel, Joshua, and Mayer Schneider. “Understanding Designer Clothing Purchases over the Internet.” Journal of Fashion Marketing and Management 14.3 (2010): 367-96. Print.

Hemphill, Clark, and Jeannie Suk. “The Law, Culture, and Economics of Fashion.” Stanford Law Review 61.5 (2009): 1147-1199. Print.

Kiely, Ray. “Capitalist Expansion and the Imperialism-Globalization Debate: Contemporary Marxist Explanations.” Journal of International Relations and Development 8.1 (2005): 27-57. Print.

Haejung, Kim, Ahn Soo-kyoung, and Judith Forney. “Shifting Paradigms for Fashion: From Total to Global to Smart Consumer Experience.” Fashion and Textiles 1.1 (2014): 1-16. Print.

White, Aoife, Anthony Aarons, and Peter Chapman. Online Retailers Thwarted by Manufacturers’ Curbs, EU Says. 2016. Web.