Inconsistency in Antitrust

84 Pages Posted: 24 Oct 2014 Last revised: 11 Sep 2015

See all articles by Ramsi Woodcock

Ramsi Woodcock

University of Kentucky College of Law

Date Written: December 3, 2013

Abstract

Antitrust prohibits cartels from charging monopoly prices but does not prohibit monopolies from charging monopoly prices. Antitrust does not ban monopoly pricing by monopolies because it thinks that unless a monopoly takes affirmative action to exclude competitors, competitors will enter the market to drive prices back down to competitive levels. Curiously, antitrust does not explain why the same effect should not drive cartel prices to competitive levels. This article argues that this inconsistency in antitrust arises because antitrust has failed to realize that mere ownership of essential inputs is itself enough to exclude competitors. This is what permits both cartels and monopolies to maintain high prices and exclude competitors without taking affirmative steps to exclude. This article argues that one response to this inconsistency would be to extend the ban on monopoly pricing to include monopolies.

Keywords: antitrust, monopoly, cartel, exclusion, collusion, competition

JEL Classification: L12, L4, L40, L41, L43, L49

Suggested Citation

Woodcock, Ramsi, Inconsistency in Antitrust (December 3, 2013). University of Miami Law Review, Vol. 68, 2013. Available at SSRN: https://ssrn.com/abstract=2514030 or http://dx.doi.org/10.2139/ssrn.2514030

Ramsi Woodcock (Contact Author)

University of Kentucky College of Law ( email )

620 S. Limestone Street
Lexington, KY 40506-0048
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
77
Abstract Views
1,494
rank
314,393
PlumX Metrics