Antitrust Law: Another Bizarro World

Peter Klein’s post about the bizarro world in which the SEC prefers not to define insider trading too carefully, lest that definition cramp the government’s prosecutorial style, reminds me of the similarly vague definition of price fixing for purposes of enforcing the antitrust laws. The best acccount I have seen of this matter comes from R. W. Grant’s Tom Smith and His Incredible Bread Machine:

“The rule of law, in complex times,
Has proved itself deficient.
We much prefer the rule of men!
It’s vastly more efficient.
Now, let me state the present rules,”
The lawyer then went on,
“These very simple guidelines
You can rely upon”
You’re gouging on your prices if
You charge more than the rest.
But it’s unfair competition
If you think you can charge less.

“A second point that we would make
To help avoid confusion:
Don’t try to charge the same amount:
That would be collusion!
You must compete. But not too much
For if you do, you see,
Then the market would be yours
And that’s monopoly!”

Funny, yes, but if you think this description is substantively a joke, then you obviously have not spent much time reading antitrust decisions. As nearly as I can tell, a violation of the antitrust laws occurs whenever the prosecutor says it has occurred. Before your indictment, you’ve no way to know whether you are in violation.