In what amounts to a slap on the wrist, Japan's Free Trade Commission (FTC) has ordered Sony to stop the practice of pressuring Wholesalers and retailers to sell it's PS2 at specific prices, a practice known in the US as "price fixing."

Why is price fixing such a big deal? It denies a retailer or wholesaler the ability to run "loss leader" promotions (selling a product under cost to get people in the door), sales, and other ways of getting people to buy the products. Plus, smaller stores frequently have to sell products for less than retail since they can't compete with the advertising of their larger competitors. Price Fixing hurts these people the most.

So why does Sony do it? Sony has a reputation for selling high-quality electronics. Reducing the price on those electronics makes the Sony brand name seem on par or less than their competitors. That's right, Sony WANTS their products priced higher than competitors (or at least, the same as their competitors) in order to make the Sony brand appear more valuable. The next time you walk into a store and see a Sony Wega TV, and think to yourself, "Gosh, that TV looks great, but it's SO expensive," remember that Sony has priced themselves out of your market intentionally to make you want them more.

This really isn't likely to impact the prices we see for the PS2 in the US, but it may have an effect on the Japanese market. Only time will tell.