Antitrust law promotes competition in the service of economic efficiency. Government regulation may or may not promote either competition or efficiency, depending on both the goals of the agency and the effects of industry "capture." Antitrust courts have long included regulated industries within their purview, working to ensure that regulated industries could not use the limits that regulation imposes on the normal competitive process to achieve anticompetitive ends. Doing so makes sense; an antitrust law that ignored anticompetitive behavior in any regulated industry would be a law full of holes. The role of antitrust in policing regulated industries appears to be changing, however. A cluster of Supreme Court decisions in the past decade have fundamentally altered the relationship between antitrust and regulation, placing antitrust law in a subordinate relationship that, some have argued, requires it to defer not just to regulatory decisions but perhaps even to the silence of regulatory agencies in their areas of expertise. Absolute antitrust deference to regulatory agencies makes little sense as a matter either of economics or experience. Economic theory teaches that antitrust courts are better equipped than regulators to assure efficient outcomes in many circumstances. Public choice theory - and long experience - suggests that agencies that start out trying to limit problematic behavior by industries often end up condoning that behavior and even insulating those industries from market forces. And as history has shown, relying on regulatory oversight alone without the backdrop of antitrust law would leave both temporal and substantive gaps in enforcement, which unscrupulous competitors could exploit to the clear detriment of consumers. The mere existence of a competition-conscious regulatory structure cannot guarantee against abuses of that structure, or against exclusionary behavior that falls just beyond its jurisdiction. Indeed - and perhaps ironically - the very regulatory structure that exists to promote competition can create gaming opportunities for competitors bent on achieving anti-competitive goals. Such "regulatory gaming" undermines both the regulatory system itself and the longstanding complementary relationship between regulatory and antitrust law. We argue that the risk of regulatory gaming provides an important example of the need for ongoing antitrust oversight of regulated industries. We define regulatory gaming as private behavior that harnesses pro-competitive or neutral regulations and uses them for exclusionary purposes. We identify three possible instances of regulatory gaming: (1) product-hopping, in which the branded company makes repeated changes in drug formulation to prevent generic substitution, rather than to improve the efficacy of the drug product; (2) manipulation of government standard-setting organizations; and (3) claims of price squeezes by partially regulated industries. Our goal in this paper is not to persuade the reader that these particular examples of regulatory gaming do or do not violate the antitrust laws. Rather, our point is that whether or not particular acts of regulatory gaming harm competition is and should be an antitrust question, not merely one that involves interpreting statutes or agency regulations. Some level of antitrust enforcement - with appropriate deference to firm decisions about product design and affirmative regulatory decisions that affect market conditions - provides a necessary check on behavior, such as product hopping, that has no purpose but to exclude competition.

Committee Serial No. 14. pt. 1/v.1: Examines the ocean freight industry antitrust law exemptions on an individual case basis to determine levels of domestic noncompetitive shipping activities caused by the dual rate system used for conference and nonconference carriers. Includes submitted correspondence and statistics on shipping companies' operations (p. 186-1014). Hearing was held in NYC; pt. 1/v.2: Continuation of hearings on antitrust law exemptions in the ocean freight industry. Includes submitted correspondence and statistics on shipping companies' operation; pt. 1/v.4: Continuation of hearings examining monopoly within federally regulated industries. Focuses on the ocean freight industry and the need for additional regulation of federally chartered steamship conference rates and independent shippers rates. Includes numerous statistical insertions on shipping company operations; pt. 1/v.5: Continuation of hearings on purported shipping industry monopolistic practices; pt. 2/v.1: Continuation of hearings on antitrust problems in the ocean freight industry; pt. 2/v.2: Continuation of hearings on monopoly problems in the ocean freight shipping industry; pt. 3/v.1: Committee Serial No. 10. Continuation of investigation into allegations of antitrust violations by the ocean freight industry through use of secret gentlemen's agreements, discriminatory anticompetitive practices, and violations of conference agreements; pt. 3/v.2: Continuation of investigation into ocean freight shipping industry anticompetitive practices.

This authoritative guide presents the reasons behind industry regulation and the legal basis for it. Text discusses calculating rate base and rate of return, cost allocation, and rate design. Added attention is given to many of the new market-oriented forms of regulation, such as service unbundling, equal access to bottleneck facilities, competitive contracting, managed competition in health care, and incentive regulation.

This collection of original essays by economists and lawyers addresses important aspects of antitrust and regulation, such as the U.S. government's merger guidelines, antitrust in regulated industries, the connection between profitability and market share, and the question of what constitutes anticompetitive behavior. The book combines economic and legal analysis to inform policymaking with theory as well as the lessons of experience in the petroleum, electric power, computer, retail food, and telecommunications industries. Antitrust and Regulationopens with John McGowan's previously unpublished background paper, "Mergers for Power or Progress," for the merger guidelines taskforce which recommended the rules adopted by the Antitrust Division of the Justice Department in 1982. This is followed by "Competition and Antitrust in the Petroleum Industry: An Application of the Merger Guidelines," by George A. Hay and Robert J. Reynolds; "Anticompetitive Mergers: Prevention and Cure," by William J. Kolasky, Jr., Philip A. Proger, and Roy T Englert, Jr.; "Industrial Markets: Another Look at the SIC Approach," by James W McKie; "Profitability and Market Share," by Morris A. Adelman and Bruce E. Stangle; "Non-Price Anticompetitive Behavior by Dominant Firms Toward the Producers of Complementary Products," by J. A. Ordover, A. O. Sykes, and R. D. Willig; "Market Conduct: When is it Anticompetitive?" by Robin C. Landis and Ronald S. Rolfe; "Can Exclusive Franchises Be Bad?" by F. M. Fisher; "Mixing Regulatory and Antitrust Policies in the Electric Power Industry: The Price Squeeze and Retail Market Competition," by Paul L. Joskow; "Preferences of Policy Makers for Alternative Allocations of the Broadcast Spectrum," by Forrest Nelson and Roger Noll; "The Financial Interest and Syndication Rules in Network Television: Regulatory Fantasy and Reality," by F. M. Fisher; and "Borrowing from Peter to Pay Paul: More on Departures of Price from Marginal Cost," by Almarin Phillips and Gary L. Roberts. Franklin M. Fisher is Professor of Economics at MIT. He is a coauthor with John McGowan and Joen Greenwood of Folded, Spindled, and Mutilated: Economic Analysis and U.S. v IBM, an MIT Press paperback.

Expanding Competition in Regulated Industries reviews the changing regulatory environment, notably incentive regulation and competition in regulated industries. Some of the major changes in electricity, gas, and telephone utilities allow for competition in local service through unbundling. This book is of interest to researchers, utility managers, regulatory commissions, and the Federal Government.

Committee Serial No. 14. pt. 1/v.1: Examines the ocean freight industry antitrust law exemptions on an individual case basis to determine levels of domestic noncompetitive shipping activities caused by the dual rate system used for conference and nonconference carriers. Includes submitted correspondence and statistics on shipping companies' operations (p. 186-1014). Hearing was held in NYC; pt. 1/v.2: Continuation of hearings on antitrust law exemptions in the ocean freight industry. Includes submitted correspondence and statistics on shipping companies' operation; pt. 1/v.4: Continuation of hearings examining monopoly within federally regulated industries. Focuses on the ocean freight industry and the need for additional regulation of federally chartered steamship conference rates and independent shippers rates. Includes numerous statistical insertions on shipping company operations; pt. 1/v.5: Continuation of hearings on purported shipping industry monopolistic practices; pt. 2/v.1: Continuation of hearings on antitrust problems in the ocean freight industry; pt. 2/v.2: Continuation of hearings on monopoly problems in the ocean freight shipping industry; pt. 3/v.1: Committee Serial No. 10. Continuation of investigation into allegations of antitrust violations by the ocean freight industry through use of secret gentlemen's agreements, discriminatory anticompetitive practices, and violations of conference agreements; pt. 3/v.2: Continuation of investigation into ocean freight shipping industry anticompetitive practices.