Current U.S. antitrust policy prohibits only a single practice,
naked price-fixing or cartels (collusion among ostensible competitors to
inflate prices). Anticompetitive mergers and unfair means of competition
are actually encouraged on the theory that, since they both lead to the
"consolidation" of industries and markets into 1 or 2 hands, the result will
be greater "efficiency" (lower unit costs) and thus lower prices for the
ultimate consumer.
Section 5 of the Federal Trade Commission Act (1914), for example,
provides: "Unfair methods of competition in or affecting [interstate]
commerce, and unfair and deceptive acts or practices in or affecting
commerce, are declared unlawful." Most of the 50 states have similar
statutes but virtually all enforcement, at both the federal and state
levels, was stopped nearly 2 decades ago. Complaints by smaller firms of
price discrimination (higher prices to them than to their larger
competitors), predatory (below-cost) pricing, exclusive arrangements that
lock them out of markets, and the like are routinely ignored by the FTC and
Justice--again on the theory that concentration is good for consumers.
In my "model" Antitrust Bill of Rights (#5 is presented below),
competition is a function of the number and size distribution of
competitors--which means that consumers can be protected ONLY by first
guarding the rights of even the smallest of competitors.
**********************
ANTITRUST
BILL OF RIGHTS
.....................................
5. The free, fair, and effective competition that is the engine of
prosperity in dynamic societies--that, in Adam Smith's memorable phrase,
creates the "wealth of nations"--is competition on the economic merits,
namely, on price and quality. No business firm, whether large or small, has
a right to be free of such fair competition. Unfair competition, on the
other hand, is the kind that is unrelated to the economic merits and thus
has the effect or injuring or excluding a competitor for reasons other than
its abilities in the two critical dimensions of price and quality.
Accordingly, it is the policy of this Nation to protect the right of every
Citizen to be free of such unfair acts and practices--to succeed or fail
solely on the basis of his own efficiency in providing price and quality to
his fellow Citizens--and upon his complaint to the Antimonopoly Authority,
they shall be forthwith enjoined without regard to their effects in any
market.
*****************
Charles Mueller, Editor
ANTITRUST LAW & ECONOMICS REVIEW
http://webpages.metrolink.net/~cmueller
