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Additional info for Antitrust Law and Economics, Volume 21
It also seems unlikely that any clothing retailer, acting individually or in parallel with others, had induced lower input prices simply by reducing its total purchases, rather than by playing off the manufacturers against each other. Finally, in his analysis of the salt cases, Peterman finds that the salt producers granted their volume discount to only a few wholesalers, all of whom were members of wholesaler groups. Because the wholesaler groups were no cheaper to serve than other wholesalers, extending this discount to the wholesaler groups constituted non-cost justified discrimination.
During the period 1998–2002, at least 133 decisions reiterated the proposition. 68 Courts recite the principle so frequently because it is fundamental to the current understanding of the antitrust laws. 69 But what is competition? How do we know if it has been reduced or restrained? Very few courts have defined the word. More often, courts simply describe the ultimate purpose of antitrust law or the fundamental harm that antitrust enforcement is designed to prevent. In doing so, however, they have in effect defined competition as a process for achieving that purpose or preventing that harm.
117 Unjustified discrimination is most likely to benefit consumers when it is transitory. By extracting an unjustified concession from an oligopolistic seller, a large buyer may set off a chain reaction that ultimately destroys the entire noncompetitive pricing structure. The process begins when a big buyer induces a discriminatory and unjustified price cut from an oligopolistic seller and other large buyers find out about it. If they demand and get the same treatment, and start shifting significant business to the accommodating seller, other sellers are likely to respond with price 42 JOHN B.