Anti-Trust, Mergers and Competition Policy

Paper Summary:

Is the current body of U.S. anti-trust law good public policy? This paper describes the roots and the current status of antitrust legislation in the U.S. with special mentioning of the Puerto Rican situation. It also covers the economic reasoning of antitrust in the light of per se unfair practices and business justification. Then, it moves on to give an overview of international antitrust regimes, namely EU, Germany, China and Brazil. It then discusses the call for loosening the law to create national champions that can compete on an international level.

Paper Outline:
Introduction
History of Antitrust Law
Public Policy Goals of Antitrust Legislation
Overview of The Economics of Antitrust
The Law: Per Se Deceptive and Unfair Business Practices and "Rule of Reason
Agencies
Consequences
International Perspective
Public Policy Discussion: The Need for National Champions?

From the Paper:

"In a concentrated market, with only a few firms, the danger is that they may find it easier to lessen competition by colluding. For example, they may agree on the prices they will charge consumers. The collusion could be in (i) an explicit agreement, or in a more subtle form known as (ii) tacit coordination or coordinated interaction . Accordingly, some cases are easier than others. The courts decided many years ago that certain practices, such as price fixing, are so inherently harmful to consumers that a detailed examination is not necessary to determine whether they are reasonable. The law presumes that they are violations - so-called per se violations - and condemns them almost automatically. Other practices demand closer scrutiny based on principles that the courts and antitrust agencies have developed. These cases are examined under a "rule of reason" analysis."

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