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Page, William H. --- "Facilitating Practices and Concerted Action Under Section 1 of the Sherman Act" [2010] ELECD 270; in Hylton, N. Keith (ed), "Antitrust Law and Economics" (Edward Elgar Publishing, 2010)

Book Title: Antitrust Law and Economics

Editor(s): Hylton, N. Keith

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847207319

Section: Chapter 2

Section Title: Facilitating Practices and Concerted Action Under Section 1 of the Sherman Act

Author(s): Page, William H.

Number of pages: 23

Extract:

2 Facilitating practices and concerted
action under Section 1 of the Sherman
Act
William H. Page*


I. Introduction
Collusion, tacit or express, is the `joint determination of outputs and
prices by ostensibly independent firms'.1 Successful collusion requires
that rivals reach consensus on the key terms and deploy some means of
detecting and penalizing cheaters, usually by tracking rivals' transaction
prices.2 `Facilitating practices' are mechanisms that enhance rival firms'
ability to police such an arrangement.3 Examples include price reporting
systems,4 preannouncements of price changes,5 most favored customer
clauses,6 meeting competition clauses,7 delivered or basing-point pricing8
and industry-wide resale price maintenance.9 Whatever else they may do,
facilitating practices make list or transaction pricing more transparent and
thus make it easier for firms to check whether their rivals are adhering to a
tacit or explicit understanding to maintain a price level. Antitrust lawyers
and economists often use the term (or a variant of it) to refer to the theory
underlying a famous public enforcement campaign that began in the late
1970s.10 But the kinds of market phenomena that the term describes were
matters of antitrust concern long before then and remain relevant subjects
of study in both antitrust law and industrial organization economics.
Facilitating practices are a species of oligopoly behavior, and therefore
relevant to the analysis of a variety of practices under the antitrust laws.
The enforcement agencies' 1992 Merger Guidelines, for example, observe
that `reaching terms of coordination may be ...