Perhaps the BEST B1G Forum anywhere, here at College Football Fan Site, CFB51!!!

Antitrust enforcement has definitely slowed in recent years. Nonetheless, Intel, Microsoft, Amazon, Apple, Meta, and Google have all had to defend themselves from the Feds. The thinking on antitrust for a long time (since the 80s) has strongly favored low pricing instead of numbers of competitors, which effectively encourages oligopoly. Price controls are quite different than antitrust enforcement, and our political culture will have to dramatically change before price controls become palatable on a widescale basis--I doubt that will happen in our lifetimes.

Can you expound a little bit to clarify what you mean when you say antitrust has favored low pricing and then say price control is not the norm and will not be the norm under the current culture?  Are you saying low-price-oriented antitrust hearings are not really enacting price control mechanisms, or that the price control uses have been limited to those few companies and it won't be widespread any time soon, or something else entirely?  I didn't follow your response.  

As an aside, count me in the camp who sure hopes we don't see widescale price controls in my lifetime.....or ever.  I don't know much about law, but I'm not a noob in economics, and I have no reason to be a fan of governments setting prices.  

The Fed DOJ's antitrust division--the primary antitrust enforcement arm--brings antitrust lawsuits when it believes that a company has too much market power. In short, a business without much market power can perform "anticompetitive" acts (you may only buy my widget if you also buy my thingy), but a business with lots of market power cannot (I am the world's preeminent widget supplier, so I cannot force you to buy my thingy along with my widget).

For the first 80 or so years of the Sherman Antitrust Act (and the associated antitrust laws that followed), the antitrust division relied heavily on how many actors existed in a market to determine whether to challenge a merger or bring an antitrust lawsuit. Example: there are only 8 companies that sell a widget in this geographic area, so my company cannot (a) merge with one of the other 7, or (b) perform some anticompetitive act (forcing my customers to also buy thingies from me).

In the 1980s, the antitrust division adopted the "Chicago School" view of market power, which changed the calculus from how many competitors there were to how much ability does any one company have to impact the market price of an item. This was a big deal because instead of protecting the other 7 widget suppliers, the antitrust division essentially said that as long as there is still significant price competition for a widget, you can do what you want regarding the sale of thingies, and your widget suppliers can merge to your heart's content. As long as there are two or three widget competitors who are big enough, I won't be able to control the price of widgets myself. Many people argue--and I'm not well enough versed to know--that this resulted in the collapse of "Main Street" businesses, leading to consolidation and oligopolies.

None of that is price controlling; the theory is that as long as there is robust price competition, prices will remain low. So Lowes and Home Depot have cornered most of the traditional hardware store market in many places, running all of the small hardware stores out of business, but because prices are still low, DOJ approves. (That's simplistic, but demonstrative.) Markets are still subject to price fixing (another big no no), which raises prices, but is rare in the traditional sense of all four remaining widget suppliers getting together and agreeing what to charge for a widget.

However, in an oligopoly, conscious parallelism--realizing that your competitors are setting a higher price that all of you widget suppliers think the market will bear, and setting your price to match--is easier to pull off, and similarly results in higher prices. Because there is no "agreement," there is no antitrust violation. Gasoline and airline prices are good examples of this in action. The fewer the market participants, the easier conscious parallelism is.

So what am I saying. Not entirely sure--basically spewing random stuff on a message board, but maybe:
When people talk about gouging, they are basically talking about whether companies are taking advantage of too much market power, essentially antitrust concerns. Pricing for what the market will bear--CAPITALISM (writ large)--is not gouging, as long as there is true market price competition. However, in markets that are closer to oligopolies, conscious parallelism starts to look a lot like gouging, but isn't considered an antitrust violation because it doesn't require actual agreement. AND under the old fashioned way of looking at market competition (how many competitors are there), maybe it would have been harder to do.

The opposite of conscious parallelism that results in tacit collusion for price fixing, is the race to the bottom.  And it happens all of the time in industry.

When people stop paying the high prices, then the universities will stop increasing them.  I dropped my season tickets 9 years ago because the cost was just too much for me and I had other priorities.  But apparently there were plenty of people lined up behind me.

This touches on my outlook for college sports. When schools and such decide to stop paying so much for coaches and players, the market will say we’re at a stable point. 

But somehow we’re not there yet. 

The Fed DOJ's antitrust division--the primary antitrust enforcement arm--brings antitrust lawsuits when it believes that a company has too much market power. In short, a business without much market power can perform "anticompetitive" acts (you may only buy my widget if you also buy my thingy), but a business with lots of market power cannot (I am the world's preeminent widget supplier, so I cannot force you to buy my thingy along with my widget).

For the first 80 or so years of the Sherman Antitrust Act (and the associated antitrust laws that followed), the antitrust division relied heavily on how many actors existed in a market to determine whether to challenge a merger or bring an antitrust lawsuit. Example: there are only 8 companies that sell a widget in this geographic area, so my company cannot (a) merge with one of the other 7, or (b) perform some anticompetitive act (forcing my customers to also buy thingies from me).

In the 1980s, the antitrust division adopted the "Chicago School" view of market power, which changed the calculus from how many competitors there were to how much ability does any one company have to impact the market price of an item. This was a big deal because instead of protecting the other 7 widget suppliers, the antitrust division essentially said that as long as there is still significant price competition for a widget, you can do what you want regarding the sale of thingies, and your widget suppliers can merge to your heart's content. As long as there are two or three widget competitors who are big enough, I won't be able to control the price of widgets myself. Many people argue--and I'm not well enough versed to know--that this resulted in the collapse of "Main Street" businesses, leading to consolidation and oligopolies.

None of that is price controlling; the theory is that as long as there is robust price competition, prices will remain low. So Lowes and Home Depot have cornered most of the traditional hardware store market in many places, running all of the small hardware stores out of business, but because prices are still low, DOJ approves. (That's simplistic, but demonstrative.) Markets are still subject to price fixing (another big no no), which raises prices, but is rare in the traditional sense of all four remaining widget suppliers getting together and agreeing what to charge for a widget.

However, in an oligopoly, conscious parallelism--realizing that your competitors are setting a higher price that all of you widget suppliers think the market will bear, and setting your price to match--is easier to pull off, and similarly results in higher prices. Because there is no "agreement," there is no antitrust violation. Gasoline and airline prices are good examples of this in action. The fewer the market participants, the easier conscious parallelism is.

So what am I saying. Not entirely sure--basically spewing random stuff on a message board, but maybe:
When people talk about gouging, they are basically talking about whether companies are taking advantage of too much market power, essentially antitrust concerns. Pricing for what the market will bear--CAPITALISM (writ large)--is not gouging, as long as there is true market price competition. However, in markets that are closer to oligopolies, conscious parallelism starts to look a lot like gouging, but isn't considered an antitrust violation because it doesn't require actual agreement. AND under the old fashioned way of looking at market competition (how many competitors are there), maybe it would have been harder to do.

Thanks for writing all that!  Very helpful.  Copying and saving for future reference.  

Now I have to go read up on the Chicago School and the Harvard School of thought on antitrust.  

I got into it in ~2006 with a neighbor about the proposed Sirius & XMRadio merger. He claimed it should be stopped because it would create a monopoly in satellite radio--which it did. I claimed it was fine because while it might be a monopoly in satellite radio, there is enough out-of-sector competition that it would be relatively difficult for the merger to cause consumer harm.

20 years later, SiriusXM subscriptions are cheaper than I recall paying for XMRadio at the time. Ultimately the fact that the single satellite radio player in the market has to compete with "free"--i.e. AM/FM and/or streaming services you already carry in your pocket--they don't have monopoly pricing power.

There's at least a part of me that thinks the other side of that coin is innovation.  Satellite radio may not be a good example (I don't know much about it, but it's the example you used, so I'm sticking with it), but regardless of price and customer satisfaction with price, how much innovation are we not getting due to lack of competition?  We can never assert counterfactuals with perfect confidence, but competition is a reliable and tested driver of innovation.  Regardless of price, would we have cooler satellite radio without SiriusXM?

I think we're getting close.

It's going to take a few more, but the more busts we see like ickell, Harsin, Frost, Venables, Muleshoe, (insert UF coach here), etc. things will start to change.

How much did Michigan pay for Underwood? Nebraska for Raiola? How much has I'm a Leavin' made so far, only to suck?

People will wise up - especially as attendance continues to be in question.

I thought it would eventually happen with coaches, but people are addicted to getting Hype about them. And to a form of financial virtue signaling.

But hopefully it at least slows soon.