Comments on: Varney Gets It Right on RPM

By: TRUTH ON THE MARKET » Correcting the Record: AAG Varney and the Chicago School’s Premature “Retirement”

Wed, 03 Feb 2010 08:04:28 +0000

[...] closing remarks at the Horizontal Merger Guidelines workshop and was fairly critical. Thom intervened to suggest that we at TOTM, while fairly critical of the agencies from time to time, [...]

By: Thom

Thom — Mon, 01 Feb 2010 16:27:31 +0000

Jesus–Yes, I discuss in some detail Klein’s terrific submission to the FTC hearings on RPM. Indeed, his thinking forms much of the basis for my criticism of the Areeda Treatise’s rule of illegality for RPM imposed on homogeneous products. The basis for the treatise’s position is that RPM is justified only if it is aimed at free-riding, and free-riding is unlikely if the product at issue is a homogeneous product not sold with point-of-sale services (consumer education about functionality, etc.). As Klein eloquently argues in the paper you mention, there are good (procompetitive) reasons for a manufacturer to utilize RPM even in the absence of free-riding.

Antitrust Guy–When the Areeda treatise refers to a homogeneous product, it means a product that is not sold with “free-rideable” point-of-sale services (i.e., if free-riding’s not a concern, the treatise reasons, then RPM is problematic). Under this use of the term, I suppose a branded product could still be homogeneous.

By: jesus alfaro

jesus alfaro — Mon, 01 Feb 2010 15:40:29 +0000

Did you take in account the last paper by B. Klein?
http://ftc.gov/opp/workshops/rpm/docs/bklein0217.pdf

By: antitrust guy

antitrust guy — Fri, 29 Jan 2010 14:43:54 +0000

Is a homogeneous product that is (or can be) distinguished by brand in fact a homogeneous product?

Or are we talking about irrational consumer decisions to prefer one brand over the other?