From: gpriores@oracle.com (gordon prioreschi)
Newsgroups: misc.legal,alt.politics.correct,soc.college
Subject: Re: the MIT anti-trust case
Date: 6 Oct 92 23:11:20 GMT
Article-I.D.: fish.GPRIORES.92Oct6151120
	<1992Sep30.053708.13964@midway.uchicago.edu>
	<1992Oct2.035543.24614@panix.com>
	<1992Oct2.163140.18023@midway.uchicago.edu>
	<1992Oct4.065023.14844@panix.com>
Organization: Oracle Corp., Belmont CA
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In article <1992Oct4.065023.14844@panix.com> lkk@panix.com (Larry Kolodney) writes:
> In <1992Oct2.163140.18023@midway.uchicago.edu> thf2@ellis.uchicago.edu (Citecheck Hell) writes:
> >In article <1992Oct2.035543.24614@panix.com> lkk@panix.com (Larry Kolodney) writes:
>>>So if the Red Cross has a policy of not permitting hospitals to resell
>>>their blood products to the highest bidder, they are in violation of
>>>the Sherman Act?
> >Why would you think that?
> As I understand it, attempts by manufacturers to fix the prices set by
>retailers is a *per se* anti-trust violation.

No. Collusion by a group of manufacturers in such an attempt is a
violation, but such an attempt by a single manufacturer is not. What
is the MSRP on a car if not such an attempt? What about all the
products you see in retail stores with the price printed directly on
the box, obviously at the factory?


>  >When American Airlines has a policy of not permitting customers to resell
>>their discount airline tickets to the highest bidder, are they in
>>violation of the Sherman Act?
> No, because an airline ticket is a executory contract,  you're free to
>sell the airline ticket to anyone you want, but American Airlines is
>not obliged to honor it.

Not to mention that American Airlines hardly has a monopoly.


> Blood is a commodity, whose price is fixed by the monopolistic Red
>Cross.

Since when does the Red Cross have a monopoly? I happen to donate
blood to a blood bank that's not affiliated with the Red Cross (not
for any particular reason; it just happens to be more convenient for
me).


> I can't see any distinction between the Ivy League forming a cartel to
>prevent competitive bidding for college scholarships, and the Red
>Cross existing as a cartel to prevent competitive bidding for blood
>products.  Can you?

The Red Cross is merely another case of a company not surrendering
_all_ rights to a product upon sale. I'm sure you've noticed some
software licenses that allow you to make exactly one copy of the
software for backup purposes; even though you've "bought" the
software, there are certain things you have not bought the right to do
with it. The Red Cross has merely decided that, for whatever reason,
it wishes to put a similar restriction on its product. If, say, the
Red Cross were to collude with the blood bank I donate to in setting
such a restriction, that would be illegal, but the Red Cross just
doing it on its own is not.

You might argue that the Red Cross (if it were actually a monopoly)
meets the same criteria that AT&T did to warrant its court-ordered
breakup, but that would be a case of a single organization having a
monopoly, a vastly different (legalistic, if not practical)
circumstance from the collusion of several organizations for the
purpose of price-fixing.


BTW, to split a linguitic hair: My handy American Heritage Dictionary
defines "cartel" as "A combination of independent business
organizations formed to regulate producation, pricing, and marketing
of goods by the members."  The Red Cross, being a single business
organization, is incapable of "existing as a cartel".


                                     Cordially,

                                           -g