No fault antitrust

[Steve Schear]

At 12:39 PM 8/8/2001 -0700, georgemw at speakeasy.net wrote:
>On 7 Aug 2001, at 14:48, Steve Schear wrote:
>
>
> > At a workshop presentation last spring I suggested a non-regulatory way to
> > include reduction in choice effects.  Under the proposed changes Congress
> > would set market size and penetration limits for all markets (based on SIC
> > or its newer offspring) exceeding some minimum size threshold (e.g., 0.1%
> > GNP) and enabling competitors to sue in federal court for removal of
> > trademarks and copyrights of the monopolist related to the industry in
> > question.  Since trademarks and copyrights are privileges and not rights
> > they can, theoretically, be rescinded.
> >
>So under this "no fault antitrust" proposal, we strip away the
>illusion that the DOJ is punishing predatory behavior and accept
>that,  in fact,  what is being punished is market share dominance?
>
>Interesting notion, here's why I don't think this will work:  the
>single difficult point in most of these antitrust cases is
>determining what constitutes the market in question in
>the first place.  For example,  in the Microsoft case,  Microsoft
>was held to have a monoploly on operating systems for computers
>which use intel processors.  Obviously,  there is no such market
>in the first place.

I think many or most on this list, not to mention within the computer 
industry, might disagree with you.

>There's a server market (in which sun competes),
>there's a personal computer market (in which Apple competes),
>but there's no fucking such thing as the Intel (or compatible)
>powered computer market,  it's as absurd a concept as the
>spaghetti sauce with Paul Newman's picture on the jar market.

This was discussed at the workshop.  Its the reason I mention the SICs.  My 
hope is that by extending these Standard Industry Codes to somewhat smaller 
gradations, none of which would be allowed to fall below some GNP 
threshold, that MS' classification (almost all of whose business currently 
falls in the Software Publishing category) might be subdivided into, for 
example, OS and Office Software Application Suites.


> > Under this new regimen companies would be inclined to self-police rather
> > than risk legal proceedings from their competitors.  By setting legal
> > market share limits and placing the initiative in the hands of competitors
> > rather than the DOJ it is hoped to remove much of the political 
> involvement
> > in antitrust.
> >
> > steve
> >
> >
>The other possible advantage of allegedly punishing companies
>for actually engaging in unethical actions rather than merely
>for getting too large a market share is the (admittedly unlikely)
>psossibility that in some cases the claims might be true.
>
>For example,  consider a hypothetical case in which, due to
>economies of scale or whatever, that there really only ought to
>be one supplier of a given product.

No.  Though my readings in antitrust have led me to the conclusion that 
there are few industries in which greater than 50% of market share are 
required for sufficient economies of scale.  One that comes to mind is 
commercial aircraft.

>Would forcing that company to
>raise its prices until its market share falls to approved levels really
>be to anyone's benefit?

It might if I get to have choices which would otherwise be foreclosed once 
one company reaches a "friction free" point in that industry.

steve