Antitrust Bill of Rights (5)

[charles mueller <cmueller@metrolink.net>]

          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.
  
  
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                                                     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