Another Pointless Antitrust Campaign by Federal Regulators
Thank goodness the US Justice Department has again saved food consumers from…well, it’s kind of hard to say. This time, the target is chicken producers, but I wrote about similar events several years ago with the dairy industry.
The latest developments involve a $110 million settlement and indictments of executives, such as chicken producer Pilgrim’s Pride on allegations of price fixing, a violation of antitrust laws. The usual impassioned arguments related to saving the hapless consumer are trotted out, but as with the dairy case, even minimal examination of the details behind the scenes leaves little or nothing to be desired with the whole process.
Let’s start with price fixing—the idea that several firms in the same industry worked together to control supply of a product for their mutual benefit. The definition of price fixing is shockingly wide open—for example, the agreement can be “inferred from conduct” (not written or stated) and goes beyond consumer prices to include “shipping fees, warranties, discount programs, or financing rates.” In addition, “circumstantial” evidence of price fixing may be all that’s needed. As stated at the link above, “When competitors agree to restrict competition, the result is often higher prices.” But surely even regulators can understand that other factors, such as increased input costs or taxes, can also result in higher prices for consumers?
The picture gets more muddled as one investi
Article from Mises Wire