Vertical restraints with horizontal consequences: competitive effects of "most-favored-customer" clauses

Article Abstract:

Current Chicago School antitrust thought that views vertical pricing arrangements favorably fails to consider the harmful effects that such agreements can have on horizontal competition. One type of vertical arrangement, the most-favored-customer clause, can be shown to have a number of adverse effects on competitors and on competition. Charging all buyers the same prices can encourage coordination among buyers. These clauses can also force non-participating competitors to raise prices. Committing to a vertical arrangement reduces the competitive options available to the buyers.

Economic aspects, Antitrust law, Vertical integration

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Empirical methods of identifying and measuring market power

Article Abstract:

New methods to help antitrust litigants measure market power have been developed. Residual demand estimation studies the way industries respond to changes in marginal cost. Studying market demand elasticity assumes that firms with market power will leave the greatest distance between prices and cost when buyers lack good alternate products. Detecting multiple pricing regimes assumes that cooperating businesses conduct their affairs differently than competing ones. Additional ways to evaluate market power are always useful since the concept is crucial in antitrust law.

Analysis, Unfair competition (Commerce), Unfair competition, Market share

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Identifying horizontal price fixing in the electronic marketplace

Article Abstract:

The reduced transaction costs and increasing information offered by electronic commerce may make horizontal price-fixing easier to engage in and more difficult for antitrust enforcers to prove. In communicating extensively with potential customers over public online services, businesses are also communicating with rivals. The consent decree enforced by the Antitrust Division against major airlines for using a reservation system to fix prices could be used as a blueprint of how to attack anticompetitive communications that also appear to benefit customers.

Scheduled Airlines, Scheduled Air Transportation, Air Transportation, Scheduled, And Air Courier Services, Investigations, Airlines, Electronic commerce, E-commerce, Price fixing

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