The Antitrust Revolution: Economics, Competition, and Policy

By John E. Kwoka Jr.; Lawrence J. White | Go to book overview

CASE 9
Rapid Price Communication
and Coordination:
The Airline Tariff Publishing Case (1994)

Severin Borenstein

A firm announces a price increase and shortly thereafter its competitor announces its own increase to the same price level. Is that price fixing? Most antitrust economists and lawyers would say no. What if the announcements are made and changed rapidly? What if each firm makes many announcements before they settle down at identical prices? Finally, what if the prices being announced are to take effect at some future date so that no sales actually take place at these prices while the announcements are being made? This is a gray area of the antitrust laws. While an agreement among competitors to fix prices is per se illegal, computer technology that permits rapid announcements and responses has blurred the meaning of “agreement” and has made it difficult for antitrust authorities to distinguish public announcements from conversations among competitors.

These were some of the issues that were raised in the U.S. Department of Justice's investigation of the major U.S. airlines and the Airline Tariff Publishing Company (ATPCO), which is owned by the airlines and disseminates price change information to airline and travel agent computer systems. The investigation began in 1991, and the resulting case was settled with a consent decree in March 1994. The case never went to trial, and therefore it set no formal precedent. Still, the legal pleadings, negotiations, and the final consent decree indicate some of the difficult antitrust issues that are raised by rapid price announcements as well as the impact of new communication technologies on those issues.

Severin Borenstein consulted for the U.S. Department of Justice in this matter. For helpful com-
ments and discussions, I am grateful to Dennis Carlton, Rob Gertner, Rich Gilbert, John Kwoka,
Carl Shapiro, and Larry White.

-233-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited page

Bookmark this page
The Antitrust Revolution: Economics, Competition, and Policy
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this book
  • Bookmarks
  • Highlights & Notes
  • Citations
/ 527

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.