Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Elmer Phud who wrote (259415)	4/4/2009 12:45:13 AM
From: Mahmoud Mohammed	Respond to of 275872

Elmer, Re: "I will ask the question again, do you claim expertise in the field of anti-trust law? If so then say so." Mr FPGuru won't answer this question because he would have to claim no such expertise. Mahmoud

To: Elmer Phud who wrote (259415)	4/4/2009 2:23:56 AM
From: fastpathguru	Respond to of 275872

I will ask the question again, do you claim expertise in the field of anti-trust law? If so then say so. I do not claim to be an expert. Happy? The first couple paragraphs in [Wikipedia] corroborate what I wrote. Not how I read it. Protecting the interests of consumers (consumer welfare) and ensuring that entrepreneurs have an opportunity to compete in the market economy are often treated as important objectives. Robert Bork has found that competition laws can produce adverse effects when they reduce competition by protecting inefficient competitors and when costs of legal intervention are greater then benefits for the consumers. Another poster has provided what might be considered a more reliable source than Wikipedia. findarticles.com First, the objective of the antitrust laws is the prevention of injury to consumers. Second, the antitrust laws are intended to protect competition, not competitors. Requiring some evidence of consumer injury ensures that the antitrust laws are applied in a fashion that is directly consistent with the fundamental objectives. This would seem to contradict your claim. I have some problems with your "more reliable source", and prefer this slightly more authoritative one that specifically addresses consumer harm: usdoj.gov But I'll get to my problems with the findarticles paper in a moment. Let's go back to the original exchange: Message 25545604 Elmer: [...]It is my understanding that the law in the US is intended to protect the consumer and in this case the consumer has benefited greatly.* Me: [...]Antitrust law is designed to protect the process of competition, i.e. to ensure that competitors cannot artificially tip the playing field to benefit themselves, especially important when a competitor wields monopoly power. A fundamental assumption of western capitalism is that consumers are best served by a properly operating market where the process of competition cannot be perverted by individual consumers or producers. We are butting heads over what is essentially no difference in position. My position is that while protecting the consumer is an important goal of antitrust law, the laws themselves are aimed at defects in the process of competition, not individual consumers. Harm to consumers is just one test of many to determine whether a defect in the process of competition is a violation of antitrust law, and is not by itself necessarily illegal. For instance, say I have a pure monopoly in the production and sale of the new and highly demanded iProduct, and I jack my prices up. Is that automatically a violation of antitrust law just because the customers have to pay more? No, unless I'm raising artificial barriers to keep competitors out of the market. That's what I mean when I elevate the protection of the competitive process over the protection of the consumer. In the actual laws, the former is much more directly addressed than the latter... Which brings me to the problems with this source of information. A) The whole purpose of this paper ("Antitrust law and proof of consumer injury") is to convince the audience that adopting a more explicit treatment of consumer protection would benefit the antitrust laws. The paragraph quoted from the paper is the subject of its argument, and is not a documentary on the actual state of antitrust law. See: The following discussion will explore the effect that making more explicit a consumer injury requirement would have on antitrust law, as well as methods for implementing a consumer injury requirement. EFFECTS OF A CONSUMER INjuRy REQUIREMENT A consumer injury requirement should become a more explicit part of the elements that must be proved by plaintiffs in cases arising under the antitrust laws. A. Claims Arising Under the Sherman Act, Section One [...] B) The paper explicitly recognizes that per se violations do not require proof of consumer harm ("In essence, under the per se rule, the anticompetitive effects, including those on consumers, are presumed, because practices, such as price fixing, are universally thought to be without the possibility of redeeming virtue.") C) It also recognizes that for rule-of-reason violations (the other type) "A plaintiff can establish anticompetitive effect through proof of increased prices, reduced output, or decreased quality." (no mention of requiring proof of consumer harm.) D) The conclusion reinforces the notion that the paper is an argument for requiring proof of consumer harm, rather than documenting that it IS a requirement: CONCLUSION The concern that actions inimical to the competitive process will go undetected and unremedied needs to be balanced against the concern that competition on the merits that injures competition will be confused with pernicious behavior. "Injury to competition" is an amorphous concept that may not take into account efficiencies and other benefits. "Injury to consumers," broadly defined, provides a surer test. To me, this paper reads like a hard-conservative-leaning grad student thesis, and not a particularly convincing one. My DOJ link is much better. fpg