According to William Landes "Ronald Coase [1991 Nobel Prize in economics] said he had gotten tired of antitrust because when the prices went up the judges said it was monopoly, when the prices went down they said it was predatory pricing, and when they stayed the same they said it was tacit collusion." (see William Landes in "The Fire of Truth: A Remembrance of Law and Econ at Chicago", JLE (1981) p.193). The current interpretation of Article 82 EC by the Commission and the Community courts is a clear illustration of what Coase had in mind.
Ronald Coase's remark is similar to author Ayn Rand's criticism of the antitrust laws:
"Under the Antitrust laws, a man becomes a criminal from the moment he goes into business, no matter what he does. For instance, if he charges prices which some bureaucrats judge as too high, he can be prosecuted for monopoly or for a successful 'intent to monopolize'; if he charges prices lower than those of his competitors, he can be prosecuted for 'unfair competition' or 'restraint of trade'; and if he charges the same prices as his competitors, he can be prosecuted for 'collusion' or 'conspiracy'. There is only one difference in the legal treatment accorded a criminal or to a businessman: the criminal's rights are protected much more securely and objectively than the businessman's." (Objectivist Newsletter, January 1962)
Posted by: Fredrik | March 30, 2005 at 12:45 AM