Maryland and New York officials reported yesterday that they have been investigating the Minolta Corp. and 47 retailers in those states because of allegations that the companies fixed the price on two popular Minolta cameras, depriving customers of hundreds of thousands of dollars in potential savings.
Officials with the offices of the attorney general in Maryland and New York said they will file suits today in federal district court against Minolta, a U.S. subsidiary of the Japanese camera maker, and many camera retailers.
W. Bell & Co., a large volume discount chain, also plans to file suit against Minolta, claiming the company refused to sell it the cameras after Bell advertised one of them for less than the minimum price set by Minolta, a Bell official said yesterday.
A draft of the Maryland suit, obtained by The Washington Post, says the alleged price fixing scheme is part of a nationwide "conspiracy."
According to the papers, Minolta conspired with 36 retailers in Maryland to set a fixed price for the cameras, the new Minolta Maxxum and AF-Tele, in exchange for a guaranteed profit.
Jim Wooton, an assistant attorney general in Maryland, said the retailers would be guaranteed a higher profit than on most other cameras and the manufacturer would benefit because the retailers would be buying more Minolta cameras.
Timothy Gilles, a spokesman for the New York state attorney general's office, said that in some cases the profit was as high as 16 percent. Normally, large retailers make a more conservative 5 to 6 percent profit on camera bodies, officials said.
As many as 10,000 Maryland customers have bought the cameras, according to the papers. The suit is expected to be filed in U.S. District Court in Baltimore by the Maryland state attorney general's office.
New York officials said a similar suit, expected to be filed by the New York state attorney general's office, claims that about 10,000 New York residents purchased the cameras. Eleven retailers are named in the New York suit.
The papers ask for three times the amount of damages suffered by consumers and that Minolta be prohibited from continuing the alleged practice.
John Halock, one of Minolta's New York lawyers, said yesterday that the company is "guilty of no violations."
He said the company's price setting policy falls within federal regulations. "We say a price is a suggested price and not absolutely fixed," Halock said.
Wooton said Minolta's practices not only violate state and federal antitrust laws, but also "create a situation where consumers are paying more than they should have had there been a free market."
The Maryland papers allege that Minolta set a fixed price of $319.95 for the Minolta Maxxum and "solicited agreements" from retailers to "adhere to the minimum retail prices." The papers claim that 36 retailers in Maryland agreed with Minolta to fix the prices. Minolta introduced the camera, the first with a removable, automatic focusing lens, in January 1985.
The papers say Minolta representatives posed as customers and checked the camera retailers to ensure that they were selling the camera for the agreed upon price.
In September, Minolta stopped supplying W. Bell & Co. with the Maxxum after Bell advertised the camera for about $30 less than other retailers.
In a Sept. 11 letter to W. Bell that is part of the Maryland papers, a Minolta official informs the company that it will no longer accept orders from W. Bell for either the Maxxum or the AF-Tele camera.
"We have suggested that all retailers offer the Maxxum camera body with a 50 mm f/1.7 lens at a retail price of at least $319.95," said the letter to Bell, signed by Robert T. Lathrop, director of sales for Minolta.
"This price, which is below our suggested list, provides to all retailers a reasonable profit margin. However, it has come to our attention that W. Bell & Company has issued a September 1985 flyer advertising the Maxxum for $289.90 and a 1985-86 catalog advertising it for $297.50. In view of the above, Minolta will no longer be accepting orders from W. Bell for the Maxxum system or any products within that system."
"We were plenty upset," said Fredric Bell, senior vice president of W. Bell, which has 13 stores in the Washington area.
"People were coming in and saying 'where is it?' " and accusing us of false advertising," he said. "We feel victimized."