Crossover grading

[benjulmag]

Originally Posted by wondo

If Company A refuses to cross from Company B is it illegal or is it the charging for the phantom service that is the problem? A bias would be extremely difficult to prove. I am skeptical of the 0/50 then 50/50 story.

I am not an antitrust lawyer but I would think it is an unfair trading practice and violates the Sherman Antirust Act. A refusal to crossover expresses the opinion that company A got it wrong. By constantly doing that company B would be besmirching company A's reputation, causing it to lose substantial business and maybe go into bankruptcy. I would think that is actionable.

[Peter_Spaeth]

Originally Posted by benjulmag

I am not an antitrust lawyer but I would think it is an unfair trading practice and violates the Sherman Antirust Act. A refusal to crossover expresses the opinion that company A got it wrong. By constantly doing that company B would be besmirching company A's reputation, causing it to lose substantial business and maybe go into bankruptcy. I would think that is actionable.

Suppose B just announces a policy that it will not cross over cards in other holders, period. With some narrow exceptions, which I won't bore you with, refusals to deal (which that would be akin to) even by a monopolist are not antitrust violations. A company generally can deal or not deal with whom it pleases at least insofar as the Sherman Act is concerned. Also, as to your hypothetical, I don't buy the premise that refusing to cross over a card is somehow tantamount to libel. And even if it were, there are some pretty onerous requirements before you can convert a business tort into an antitrust violation.

PS I am only responding to your antitrust point. I would have to think about other possible claims, and who would have standing to bring them.

[barrysloate]

I get the impression that grading company A will not crossover grading company B's cards because they are trying to run their competition out of business. They want customers to believe that only their grades are valid, and the competition is either overgrading or slipping bad cards through.

TPG's are given submissions to grade cards objectively, based solely on the characteristics of the card. If they are playing politics to drive out their competitors that is outrageous.

[Peter_Spaeth]

Originally Posted by barrysloate

I get the impression that grading company A will not crossover grading company B's cards because they are trying to run their competition out of business. They want customers to believe that only their grades are valid, and the competition is either overgrading or slipping bad cards through.

TPG's are given submissions to grade cards objectively, based solely on the characteristics of the card. If they are playing politics to drive out their competitors that is outrageous.

All companies want customers to believe their products are the best, and many aggressively promote that idea. That's competition. The rough and tumble of the world of commerce, as some case I can't recall now puts it. Why do I have to help out my competitor?

[barrysloate]

I don't expect them to help their competition, but collectors spend an awful lot of money to have their cards graded (perhaps you've noticed the dramatic rise in the cost of grading fees). In return for all this money we're sending them, I expect an accurate and unbiased opinion. Sounds to me some of their opinions are extremely biased.

[Peter_Spaeth]

Originally Posted by barrysloate

I don't expect them to help their competition, but collectors spend an awful lot of money to have their cards graded (perhaps you've noticed the dramatic rise in the cost of grading fees). In return for all this money we're sending them, I expect in return an accurate and unbiased opinion. Sounds to me some of their opinions are extremely biased.

Fine, but now we're talking about an issue of whether PSA is treating its customer appropriately or taking its money unfairly, not whether there is some antitrust violation.

[Peter_Spaeth]

PS there is no chance SGC is going to sue PSA for not crossing SGC cards into PSA holders. Do you think it wants to publicize that people are trying to do that?

[Promethius88]

To think there would be any actual legal basis is a far stretch and almost impossible to prove, in my opinion. To suggest that "Company B" is doing this to crush "Company A" also seems to be a stretch. First off, there has to be a reason that people are trying to cross cards over to "Company B" slabs. Most likely it would be monetary reasons, ie, cards in "Company B" slabs sell for more than "Company A" slabs. This is my logic, and it could be flawed, but to me it would make more sense for "Company B" to go ahead and slab those cards to be in their own holders if they wanted to crush the competition since they would then have more cards holdered than the other company hence taking up a greater market share. But, they could only do that if the cards were accurately graded in the first place. If they aren't, then that blows the whole premise of this discussion.
Personally, if I'm heading up a TPG, I'm not accepting crossovers in the first place. Why take the risk of cracking a card from a holder and having it damaged. I'm sure there's a terrific process in place, but I'm sure it still happens from time to time.

[Peter_Spaeth]

Originally Posted by Promethius88

To think there would be any actual legal basis is a far stretch and almost impossible to prove, in my opinion. To suggest that "Company B" is doing this to crush "Company A" also seems to be a stretch. First off, there has to be a reason that people are trying to cross cards over to "Company B" slabs. Most likely it would be monetary reasons, ie, cards in "Company B" slabs sell for more than "Company A" slabs. This is my logic, and it could be flawed, but to me it would make more sense for "Company B" to go ahead and slab those cards to be in their own holders if they wanted to crush the competition since they would then have more cards holdered than the other company hence taking up a greater market share. But, they could only do that if the cards were accurately graded in the first place. If they aren't, then that blows the whole premise of this discussion.
Personally, if I'm heading up a TPG, I'm not accepting crossovers in the first place. Why take the risk of cracking a card from a holder and having it damaged. I'm sure there's a terrific process in place, but I'm sure it still happens from time to time.

Tim I've often wondered the same thing, why PSA wouldn't WANT to take SGC cards off the market. I suppose the counterargument could be that by making cross-over difficult they're discouraging people from buying SGC cards in the first place. But either way I don't see SGC suing them and I think there are some serious obstacles to framing an antitrust violation on these facts.

[benjulmag]

The facts I am positing my question on are :

1. Company B has a stated policy of crossing over slabbed cards from company A that meet company B's criteria. If we are talking about Company A being SGC and Company B being PSA, unless things have changed, PSA will cross over SGC cards if they meet PSA's criteria.

2. It can be proven that the reason the cards will not be crossed over is some unstated rule that PSA wants to put SGC out of business and in furtherance of that end they will not cross over SGC cards.

3. The reason PSA gives in returning the cards not crossed over is that they do not satisfy PSA's criteria.

4. SGC loses a lot of customers and suffers significant damages.

5. In time PSA becomes the only remaining TPG in the hobby.


Under those facts (which let's assume can be proven), Peter, are you saying SGC has no actionable claim against PSA, and also that this has nothing to do with antitrust law?

[Peter_Spaeth]

Originally Posted by benjulmag

The facts I am positing my question on are :

1. Company B has a stated policy of crossing over slabbed cards from company A that meet company B's criteria. If we are talking about Company A being SGC and Company B being PSA, unless things have changed, PSA will cross over SGC cards if they meet PSA's criteria.

2. It can be proven that the reason the cards will not be crossed over is some unstated rule that PSA wants to put SGC out of business and in furtherance of that end they will not cross over SGC cards.

3. The reason PSA gives in returning the cards not crossed over is that they do not satisfy PSA's criteria.

4. SGC loses a lot of customers and suffers significant damages.

5. In time PSA becomes the only remaining TPG in the hobby.


Under those facts (which let's assume can be proven), Peter, are you saying SGC has no actionable claim against PSA, and also that this has nothing to do with antitrust law?

There are so many issues with the hypothetical it's hard to accept it, the biggest one being that one company's refusal to take another's cards OFF the market (and thus leave them ON the market) somehow put that company out of business. It sounds absurd. SGC's existence depends on PSA legitimizing its product and putting its own brand on it? I mean come on. I can't even think of an analogy it seems so far-fetched. It would be, maybe, like Ford claiming GM has some obligation to endorse its cars, or that GM dealers are obligated to stock Ford parts and service Ford cars. Be that as it may, I don't think the antitrust laws would impose a duty on PSA to cross over its competitor's cards regardless of its intent. As I said, there are some narrow exceptions to the general principle that a monopolist may refuse to deal (term of art) with a competitor but I don't see one applying here.

PS the antitrust laws exist to protect and promote competition. SGC in your hypothetical should be looking to improve its product, not looking to PSA to legitimize it.

[Promethius88]

Couldn't it also be reasonably argued that because grading is subjective that the alleged "50 cards" may have been borderline when viewed in the SGC holders? I don't care if we are talking Company A, Company B, or Company C to Z.... you submit raw cards 10 different times you may get several different grades.
I just don't see that any of these "facts" are really provable.

[boneheadandrube]

Option 1 - Crossover Submission:
If company "B" has a huge backlog of orders to fill and its worker sees a stack of crossovers from company "A" in his ever filling inbox, he can make his day easier by just checking the "will not cross" box on his worksheet for 50% of them without even taking the time to look. Worker and manager know that they will likely be resubmitted raw at some point in future and they will be paid twice.

Option 2 - Raw Submission:
This worker from company "B" with the overflowing inbox can also check the "N5" box on his worksheet for 15% of raw cards so he can go to lunch earlier, there is no real explanation of N5 to the customer anyway. Worker and manager know that they will likely be resubmitted again at some point in future and they will be paid twice.

[Peter_Spaeth]

Originally Posted by boneheadandrube

Option 1 - Crossover Submission:
If company "B" has a huge backlog of orders to fill and its worker sees a stack of crossovers from company "A" in his ever filling inbox, he can make his day easier by just checking the "will not cross" box on his worksheet for 50% of them without even taking the time to look. Worker and manager know that they will likely be resubmitted raw at some point in future and they will be paid twice.

Option 2 - Raw Submission:
This worker from company "B" with the overflowing inbox can also check the "N5" box on his worksheet for 15% of raw cards so he can go to lunch earlier, there is no real explanation of N5 to the customer anyway. Worker and manager know that they will likely be resubmitted again at some point in future and they will be paid twice.

In that vein people have long suspected PSA of hammering cards in the hope that some will get resubmitted or reviewed, for more fees.