Explicit conspiracy? The current/future nature of price info created a likelihood that it would push salaries down, whether or not there was an (though one suspects there may have been) so a violation. actual conspiracy it’s 3. Agreements of Competitors to Restrain their Own Competition------------------- a. Professional Restraints and By-Laws: did this else ware so really just background here. it’s b. Brown/MIT US v. Brown (3d Cir. 1993): Facts: The Ivies and MIT agree not to compete via financial aid for students who have been accepted by multiple institutions in an attempt to move to a need-based aid model in order to expand access to higher education. Public interest defense? No dice (explicitly anyway), but not per se illegal The court distinguishes from superior court trial lawyers on the grounds that the attys in that case stood to gain financially from what could also be construed as a public interest, whereas here there is no financial interest to sully the public interest. For this reason, they do not find per se violation, but go to full rule of reason analysis. Competition on price: It used to be that the most intense price competition was in the fin aid area, especially with regard to minority students. So is this elimination a harm to competition? Surely to those consumers who would otherwise receive competitive financial aid offers. Information-sharing harm: the process of coordinating this agreement required intense information sharing, presenting a danger of cartel-like price increases, as corroborated by the similarity in tuitions and fast-paced increases in tuition. D argued for educational immunity from AT laws: Rejected! We’re non-profit The cost of education is actually mush higher than tuition, the rest being made up by donors Going along with this, the agreement was an attempt to reallocate this pool of money (tuition plus donations) in a more accessible/equitable way For these reasons, it make sense to analyze education under normal doesn’t market assumptions. Court rejects immunity argument. Output limitation? The same number of students will come to these colleges no matter what, so no output limitation, which mitigates the anticompetitive harm and there’s perhaps makes the court more open to the procompetition arguments, weak as they are. Procompetitive benefits: Rejected!
Explicit conspiracy? The current/future nature of price info created a likelihood that it would push salaries down, whether or not there was an actual conspiracy (though one suspects there may have been) so it’s a violation. 3. Agreements of Competitors to Restrain their Own Competition------------------- a. Professional Restraints and By-Laws: did this else ware so it’s really just background here. b. Brown/MIT US v. Brown (3d Cir. 1993): Facts: The Ivies and MIT agree not to compete via financial aid for students who have been accepted by multiple institutions in an attempt to move to a need-based aid model in order to expand access to higher education. Public interest defense? No dice (explicitly anyway), but not per se illegal The court distinguishes from superior court trial lawyers on the grounds that the attys in that case stood to gain financially from what could also be construed as a public interest, whereas here there is no financial interest to sully the public interest. For this reason, they do not find per se violation, but go to full rule of reason analysis. Competition on price: It used to be that the most intense price competition was in the fin aid area, especially with regard to minority students. So is this elimination a harm to competition? Surely to those consumers who would otherwise receive competitive financial aid offers. Information-sharing harm: the process of coordinating this agreement required intense information sharing, presenting a danger of cartel-like price increases, as corroborated by the similarity in tuitions and fast-paced increases in tuition. D argued for educational immunity from AT laws: Rejected! We’re non-profit The cost of education is actually mush higher than tuition, the rest being made up by donors Going along with this, the agreement was an attempt to reallocate this pool of money (tuition plus donations) in a more accessible/equitable way For these reasons, it doesn’t make sense to analyze education under normal market assumptions. Court rejects immunity argument. Output limitation? The same number of students will come to these colleges no matter what, so there’s no output limitation, which mitigates the anticompetitive harm and perhaps makes the court more open to the procompetition arguments, weak as they are. Procompetitive benefits: Rejected!
Fox__Spring_2012_Antitrust.docx