The Justice Department and Federal Trade Commission decided earlier today that they would “expedite” requests for antitrust guidance on business ventures in hurricane-affected areas. Normally when a business requests antitrust review of a proposed venture, the wait is 90 days, but our benevolent regulatory overlords will cut that down to five days in the aftermath of the Gulf Coast’s destruction.This is from a statement issued by the DOJ and FTC:
In the wake of the extraordinary devastation resulting from Hurricanes Katrina and Rita, cooperation among federal, state, and local governments, private organizations, and businesses will be necessary to rebuild the communities and the economies affected by the hurricanes. The federal antitrust laws are sufficiently flexible and resilient to accommodate beneficial collaborations, including collaborations among competitors, of appropriate scope and limited duration. At the same time, however, the Antitrust Division of the Department of Justice and the Federal Trade Commission (“the Agencies”) will not tolerate any attempt by competing businesses to undertake naked price fixing or market allocation agreements and thereby prey on those affected by Hurricanes Katrina and Rita.
This statement offers one of the clearest examples that I’ve seen of the antitrust agencies’ fundamental hatred of social cooperation. The language betrays a sense that the FTC and DOJ will tolerate cooperation in a highly restricted and supervised manner, but that ultimately, violence must rule the day.
The function of a regulatory agency is the production of social conflict. A regulator invents a problem, convinces the public that there is an immediate threat to its interests, and then offers a “solution” that doesn’t actually solve the problem—for the agency would put itself out of business—but manages it in perpetuity. This is the pattern we see in the FTC-DOJ statement: Price fixing and market allocation remain dire threats to the public, and even emergency circumstances can’t thwart our efforts to attack these scourges.
What the antitrust agencies, and indeed all regulators, fear is that the situation in the Gulf Coast will lead people to rely less on government and more on social cooperation—free markets—to meet their needs. Thus, the agencies make superficial concessions while reasserting their monopolistic authority.
(Cross-posted at the Voluntary Trade Council Weblog)
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It’s interesting to see them say it. What do you think they actually mean by “market allocation”? Is that private “rationing”? If so, that’s terribly ironic…
Market allocation often refers to so-called “bid rigging” where competing firms agree not to bid for each others clients. Of course, this raises the question of why the FTC doesn’t complain about “no-bid” contracts that were awarded by the administration for “disaster relief.” It’s the same behavior, just done with confiscated (taxpayer) funds instead of private property.
OK, so this market allocation will only continue while it is beneficial for all companies involved, for example if the know they can’t provide to extra clients, say. They save a lot of wasted time that way, I suppose.
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