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Friday, August 31, 2012

Noll on the Rabbi Cartel

Posted by Roger Noll

The Rabbinical Assembly has issued a response to the NY Times article on Barak Richman and the Rabbi cartel.  In that response, the RA makes the following legal argument:

Professor Richman incorrectly attempts to apply antitrust concepts intended for the business marketplace to a religious movement. This crucial distinction was best characterized by Senator John Sherman the sponsor and namesake of the Sherman Antitrust Act, who stated that churches are not covered under this nation's antitrust laws: "I do not see any reason for putting in temperance societies any more than churches or school-houses or any other kind of moral or educational associations that may be organized. Such an association is not in any sense a combination or arrangement made to interfere with interstate commerce" (21 Cong.Rec. 2658-59 (1890).).

The key sentence is the last one:

Such an association is not in any sense a combination or arrangement made to interfere with interstate commerce.

Trade associations are (presumptively, at least) not made to interfere with interstate commerce and can serve valid purposes that raise no antitrust issues. But that does not mean that the organization can't be used for some other purpose that is anticompetitive.

The speech by Sherman was motivated by the claim that the actions of temperance societies to shut down sales of alcohol would violate the Sherman Act. A parallel today is attempts by some Christian churches to prohibit the sale of the "morning after" pill. The key here is that the goals of these organizations was legislation, not monopolization of a product. "Speech" to achieve a political end is not an antitrust violation, even if done by a trade association.

http://lawprofessors.typepad.com/antitrustprof_blog/2012/08/noll-on-the-rabbi-cartel.html

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