Monday, June 09, 2003

Antitrust News: Daily Roundup

First, we have news of Oracle raising antitrust concerns:
The chief executive of J.D. Edwards on Monday said Oracle's hostile bid for his company's intended acquirer PeopleSoft would ``drive out'' competition from a key area of business software and raise ``serious anti-trust issues.''

Robert Dutkowsky, J.D. Edwards' president and chief executive, said that Oracle's hostile bid would require an extensive review by antitrust regulators in the United States and European Union because it would eliminate PeopleSoft as one of Oracle's biggest rivals. A week ago, PeopleSoft had said it intended to buy Denver-based J.D. Edwards in a stock deal now valued at around $1.84 billion.
Oracle, of course, was a major instigator of the Microsoft antitrust case. Turnabout may not be fair play here—antitrust is wrong, regardless of circumstance—but there is a powerful lesson here. When you use antitrust against a rival, the day will likely come when someone will use antitrust against you. It's a vicious cycle with no long-term winners, at least in a free-market context.

Second, we have the latest in the long-running vitamin antitrust wars:
Organizations in Tennessee will split $5.6 million as part of a national settlement with vitamin manufacturers who allegedly engaged in price-fixing.

The Tennessee money, which represents the largest antitrust settlement in the state's history, will go to 75 organizations who'll use it to improve health and nutrition.

The alleged price-fixing pushed up costs for vitamin tablets as well as cereal, meat and baby food enriched with vitamins.

"We are pleased so many Tennesseans will benefit from such an unfortunate situation," Tennessee Attorney General Paul Summers says.
Funny how the money from these large antitrust settlements never go to the actual victims. Perhaps that's because there were no actual victims. After all, the vitamin companies never forced anyone to pay a particular price for their products.

Finally, some good news—the government actually admitted they were wrong for once:
Antitrust enforcers Monday recommended that the government abolish key regulations on airline computer reservations systems (CRS), saying they have failed to foster competition in the industry.

The Justice Department advised the Transportation Department, which is weighing the matter, that the long-standing rules may have imposed unnecessary costs on consumers and should not be extended after they expire next January.

Justice officials recommended that transportation regulators abandon price regulations that require reservation systems to charge all airlines the same prices for the same services. They argue that the price rules have not led to competitive CRS fees and may have hurt the ability of some airlines to negotiate lower ones.

There are four CRS companies operating in the United States, and airlines remain heavily dependent on them to sell tickets, even though Internet sales have become more popular. CRS operations provide the essential link between airlines and travel agents.
Yup, government price controls never benefit consumers. Hardly a shocking discovery. Of course, the antitrust regulators continue to believe price controls will work on other areas of the economy, such as physician services.

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