Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Antitrust Syllogism of the Day

with 5 comments

Combine: “… negotiation between competitors may facilitate the supreme evil of antitrust: collusion” (Supreme Court Justice A. Scalia, Verizon Communications, Inc. v. Law O¢ ces of Curtis V. Trinko LLP, 2004)

with: “Collusion of firms can take many forms, of which the most comprehensive is outright merger” (G. J. Stigler, “Theory of Oligopoly”, (1964) 72 Journal of Political Economy, 44)

and get → “the supreme, most comprehensive, evil of antitrust is outright merger

Or a good antitrust illusltration of the limits of legal syllogism.

Written by Nicolas Petit

9 June 2011 at 11:44 pm

Posted in Uncategorized

5 Responses

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  1. I think it should read “merger CAN be the supreme, most comprehensive, evil of antitrust”, because you have the the qualifications “may” and “can” in your propositions.

    Is there logic in antitrust?

    10 June 2011 at 10:55 am

    • yes but imho “may” correlates to negotiations and “can” to the fact that there are several types of collusiosn and one of them IS merger… so, as it IS a form of collusion, merger IS the supreme, most comprehensive, evil of antitrust..

      petrulin

      14 June 2011 at 10:12 am

  2. This come back to my student-like question: why is a cartel between two firms having each 15% market shares prohibited because it would coordinate their prices while a merger between the same firms will (most likely) not be prohibited although it has exactely the same results (i.e. price coordination)?

    laurent

    10 June 2011 at 11:07 am

    • A goooood question. My take: greater redeeming efficiencies for merger. Plus educational, compliance-fostering value of sanctioning all cartels, regardless of MS level? My syllogism also illustrates the limits of mixing law with econ 🙂

      Nicolas Petit

      10 June 2011 at 11:18 am

    • i’d take a guess that because a merger gives work to more lawyers in a law firm so it generates more work and is therefore more prosocial… 🙂

      petrulin

      14 June 2011 at 10:15 am


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