Revitalizing Antitrust in Its Second Century: Essays on Legal, Economic, and Political Policy

By Harry First; Eleanor M. Fox et al. | Go to book overview
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bottleneck facilities controlled by the majors. This should include effective interconnection by trunkline carriers with feeder lines and obligations of deregulated pipelines to carry nonowned gas -- that is, to operate in some aspects as a regulated public utility.
Strict scrutiny should be the rule in reviewing mergers and acquisitions by deregulated majors. Buying out discounters and other "disrupters" of the status quo should especially be discountenanced. Alleged efficiencies should be tested against a demonstrated likelihood that the cost reductions will be passed on to consumers. Such a requirement appears in § 85 (3) of the Treaty of Rome, as a condition of approval of efficiency-enhancing cartels within the European Economic Community. It is also a test of power since cost savings would have to be passed on in a competitive industry.
Deregulation should be phased in so that industries, regions, and customers who have become dependent on major firms have time to adjust to the new environment. 10

I add, finally, that preoccupation with "power" should not be allowed to obstruct legislation directed at curtailing commercial practices of dubious value such as tying, resale price maintenance, and vertical territorial restraints, or at authorizing the Federal Trade Commission to proscribe unfair practices. The practices themselves are almost invariably inimical to consumers, and the world would not collapse if they were flatly forbidden, excepting only de minimis vertical controls by small units endeavoring to break into a market. Arguments, often theological, about power too frequently frustrate efforts to enhance the power of consumers to make their own choices.


NOTES
1.
Cf. Symposium on the Economic, Political, and Social Goals of Antitrust Policy, 125 U. Pa. L. Rev. 1182 ( 1977), especially Sullivan, What Are the Sources of Wisdom for Antitrust?, id. at 1214.
2.
Williamson, chapter 10 in this volume, at note 16, quoting Kenneth Arrow (emphasis supplied).
3.
See, e.g., id. at text accompanying notes 84-95, 120; cf. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 ( 1986).
4.
Id. at text accompanying note 91.
5.
A classic recognition of the multifactorial nature of a judgment as to power is Judge Knox's opinion on the relief to be granted following the finding that ACOA violated Section 2. He refused to be governed by market percentages ("a shorthand expression of power"), but chose instead to appraise the total resources of the defendant including its vertical integration, diversification, plant capacity, manufacturing costs, electric power resources, research and patent positions, affiliations through family ties with Aluminum of Canada, etc. See United States v. Aluminum Co. of Am., 91 F. Supp. 333, 364 et seq. ( S.D. N.Y. 1950).

-252-

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Revitalizing Antitrust in Its Second Century: Essays on Legal, Economic, and Political Policy
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