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Competition Policy and Price Fixing - Hardcover

Kaplow, Louis

 
9780691158624: Competition Policy and Price Fixing
Hardcover
ISBN 10: 0691158622 ISBN 13: 9780691158624
Verlag: Princeton University Press, 2013

Inhaltsangabe

Throughout the world, the rule against price fixing is competition law's most important and least controversial prohibition. Yet there is far less consensus than meets the eye on what constitutes price fixing, and prevalent understandings conflict with the teachings of oligopoly theory that supposedly underlie modern competition policy.



Competition Policy and Price Fixing provides the needed analytical foundation. It offers a fresh, in-depth exploration of competition law's horizontal agreement requirement, presents a systematic analysis of how best to address the problem of coordinated oligopolistic price elevation, and compares the resulting direct approach to the orthodox prohibition.


In doing so, Louis Kaplow elaborates the relevant benefits and costs of potential solutions, investigates how coordinated price elevation is best detected in light of the error costs associated with different types of proof, and examines appropriate sanctions. Existing literature devotes remarkably little attention to these key subjects and instead concerns itself with limiting penalties to certain sorts of interfirm communications. Challenging conventional wisdom, Kaplow shows how this circumscribed view is less well grounded in the statutes, principles, and precedents of competition law than is a more direct, functional proscription. More important, by comparison to the communications-based prohibition, he explains how the direct approach targets situations that involve both greater social harm and less risk of chilling desirable behavior--and is also easier to apply.

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Über die Autorin bzw. den Autor

Louis Kaplow is the Finn M. W. Caspersen and Household International Professor of Law and Economics at Harvard University and a Research Associate at the National Bureau of Economic Research. His books include The Theory of Taxation and Public Economics (Princeton).

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"Kaplow has produced what is likely to be recognized as the definitive work on price fixing. His analysis is rigorous, comprehensive, lucid, and convincing."--Richard A. Posner, University of Chicago Law School

"Kaplow challenges--with gusto--the very foundations of existing price fixing doctrine. Read this book with an open mind and you will come away questioning basic concepts long taken for granted in antitrust law. Kaplow's analysis is precise and devastating. Prepare to be challenged and rewarded by this brilliant and radical book."--Carl Shapiro, University of California, Berkeley

"This is an ambitious book by a renowned scholar of antitrust law and economics on one of the most important and difficult topics in antitrust. Professor Kaplow demonstrates that current antitrust law for price fixing is fundamentally flawed and provides a fascinating road map for a new approach."--Richard J. Gilbert, professor emeritus, University of California, Berkeley

"This is the most significant book on the law and economics of collusion since Richard Posner's 1976 classic,Antitrust Law. Kaplow offers a well-conceived framework for examining the welfare impact of a price fixing regime and then uses it to produce many important insights. This provocative book will prove invaluable to scholars in economics and the law who work in the area of antitrust/competition policy. It is a must-read."--Joseph E. Harrington, University of Pennsylvania

Aus dem Klappentext

"Kaplow has produced what is likely to be recognized as the definitive work on price fixing. His analysis is rigorous, comprehensive, lucid, and convincing."--Richard A. Posner, University of Chicago Law School

"Kaplow challenges--with gusto--the very foundations of existing price fixing doctrine. Read this book with an open mind and you will come away questioning basic concepts long taken for granted in antitrust law. Kaplow's analysis is precise and devastating. Prepare to be challenged and rewarded by this brilliant and radical book."--Carl Shapiro, University of California, Berkeley

"This is an ambitious book by a renowned scholar of antitrust law and economics on one of the most important and difficult topics in antitrust. Professor Kaplow demonstrates that current antitrust law for price fixing is fundamentally flawed and provides a fascinating road map for a new approach."--Richard J. Gilbert, professor emeritus, University of California, Berkeley

"This is the most significant book on the law and economics of collusion since Richard Posner's 1976 classic,Antitrust Law. Kaplow offers a well-conceived framework for examining the welfare impact of a price fixing regime and then uses it to produce many important insights. This provocative book will prove invaluable to scholars in economics and the law who work in the area of antitrust/competition policy. It is a must-read."--Joseph E. Harrington, University of Pennsylvania

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Competition Policy and Price Fixing

By LOUIS KAPLOW

PRINCETON UNIVERSITY PRESS

Copyright © 2013 Princeton University Press
All rights reserved.
ISBN: 978-0-691-15862-4

Contents

Preface....................................................................xiii
1. Introduction............................................................1
PART I: HORIZONTAL AGREEMENTS..............................................
2. Defining the Problem....................................................21
3. Communications..........................................................50
4. Statutory Provisions and Higher Court Interpretations...................69
5. U.S. Lower Court Practice...............................................101
6. Paradox of Proof........................................................125
7. Oligopoly Theory and the Agreement Requirement..........................174
PART II: PRICE-FIXING POLICY...............................................
8. Social Welfare..........................................................217
9. Framework for Decision-Making...........................................231
10. Detection: Market-Based evidence.......................................256
11. Detection: Other Types of evidence.....................................286
12. Liability Assessment...................................................307
13. Sanctions..............................................................322
14. Unilateral Market Power................................................346
15. Additional Considerations..............................................368
PART III: COMPARISON OF APPROACHES.........................................
16. Communications-Based Prohibition.......................................387
17. Detection of Prohibited Communications.................................398
18. Further Topics.........................................................420
19. Conclusion.............................................................443
References.................................................................455
Index......................................................................475

CHAPTER 1

Introduction

* * *


The rule against price fixing is the least controversial prohibition incompetition law throughout the world, and the practice is universallysubject to the law's harshest penalties. There is, however, far less consensusthan meets the eye on what constitutes price fixing and on how legalregimes should determine its presence. More surprising, prevalent understandingsare not grounded in oligopoly theory even though moderncompetition policy is widely taken to rest on economic substancerather than legal formalism.

This book's central aim is to provide an analytical foundation for designingpolicy toward coordinated price elevation in oligopolistic industries.In rough terms, the proper methodology is straightforward.First, one articulates the problem and undertakes welfare-based analysisto specify the benefits and costs of attempts to control it. Next, oneexamines how coordinated price elevation is best detected, attending tothe error costs associated with different types of proof. Finally, one setsappropriate sanctions.

These elements of a direct approach have received remarkably littleattention in the literature. Instead, commentators, government agencies,and courts display some tendency to focus on penalizing certainsorts of interfirm communications that facilitate coordinated oligopolypricing. Although such punishment has great value for unmaskedcartels, systematic comparison with a more direct, functional approachreveals conventional means to be inferior and in important respectscounterproductive in cases without smoking-gun evidence. In thosesettings, a direct approach dominates the conventionally favoredcommunications-based prohibition in that the former targets situationsthat involve both greater social harm and less risk of chillingdesirable behavior than those most likely to generate liability under thelatter. The direct approach is also less difficult to administer, contraryto conventional wisdom.

On reflection, these conclusions are hardly unexpected. Direct approachestend to be superior to indirect, circumscribed ones. Analysts,enforcers, and adjudicators usually do best by asking the right question—theone of direct social concern—rather than by attempting toanswer a different one. Sometimes indirect tactics turn out to be superior,but this can be ascertained only after sustained analysis that articulatesthe competing methods and explicitly assesses their differences. Itis therefore striking that many of the topics investigated here have beenso neglected.

This book proceeds in three parts. Part I offers a fresh, in-depthexploration of competition law's horizontal agreement requirement.Many commentators and, to a degree, courts see this command as imposinga constraint on the inquiry and largely dictating the use of acommunications-based prohibition rather than a direct approach to theproblem of coordinated oligopolistic price elevation. This conventionalview is shown to be incoherent, with the key statutory terms and underlyingconcepts actually being more in accord with a direct approach.Furthermore, much doctrine as well as practice, both in court and outside,is more consistent with a broader view of the law's prohibition. Finally,it is explained that the narrower interpretation of the agreementrequirement has no analogue in modern oligopoly theory, so any attemptto maintain such a legal rule really has to be highly formalistic,divorced from economic precepts.

With much underbrush having been removed, part II analyzes theproblem of coordinated oligopolistic price elevation, starting from firstprinciples. The initial step is to assess—more explicitly, carefully, andcompletely than is usually done—the nature of the social problem, includingthe possible costs of regulation in terms of chilling desirablebehavior through the risk of false positives. The second step is detection,which, it is emphasized, can be done in a number of ways thatvary across contexts in their availability and accuracy. Third, one mustapply sanctions, another topic that has suffered from too little attention.Contrary to much existing commentary, emphasis here is placedon the deterrent role of remedies, rather than on their ex post ability torestore competition, because a well-functioning system will discouragemost violations and prospective compliance is best achieved throughthe threat of sanctions, not legal injunctions that are more akin tocommand-and-control regulation.

Part III explicitly compares a direct approach to the orthodox one,a communications-based prohibition. There is an important sense inwhich this part is not logically necessary, for part II undertakes aground-up analysis of the problem and a communications-based prohibitionis not what emerges. However, given the nearly exclusive focuson this method by commentators as well as the...

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Verlag
Princeton University Press
Erscheinungsdatum
2013
Sprache
Englisch
ISBN 10 
0691158622
ISBN 13 
9780691158624
Einband
Gebundene Ausgabe
Anzahl der Seiten
490
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