By: TRUTH ON THE MARKET » Dear Mr. Toobin

TRUTH ON THE MARKET » Dear Mr. Toobin — Thu, 17 Sep 2009 19:05:11 +0000

[...] Mr. Toobin clearly did not get this memo. Descriptions of resale price maintenance agreements between manufacturers and retailers are not collusion in the antitrust sense, a label that connotes horizontal price-fixing between competitors. Toobin’s explanation implies that what the Roberts court did was make it more difficult to prove a price-fixing agreement that harms consumers. In the United States where the difference is not only economic but also legal, there is simply no excuse to use the words “cartel” or “price-fixing” to describe RPM. Yes, a vertical agreement “fixes prices” but this is a fairly transparent attempt to obfuscate the economic issues (empirically RPM generally increases consumer welfare and does not have cartel-like effects) by analogizing it to a cartel. If one was not paying attention, or knew nothing about antitrust economics, they could take the wrong impression from Toobin’s description that the Court reached an anti-consumer and pro-business result. That’s a silly way to think about RPM as discussed here. [...]

By: Josh

Josh — Wed, 11 Feb 2009 23:10:10 +0000

Ha! I tried four versions of some such joke in the draft post but couldn’t get it quite right. I’m glad somebody did …

By: Thom

Thom — Wed, 11 Feb 2009 22:27:57 +0000

Looks like the Bloomberg folks made a serious boner. But c’mon, Josh. Were you really surprised that the erection drug arrangement turned out to be vertical rather than horizontal?

Comments on: To Whom It May Concern: Please Stop Calling RPM Agreements Cartels (or Price-Fixing)

By: TRUTH ON THE MARKET » Dear Mr. Toobin

By: Josh

By: Thom