Tuesday, February 20, 2007

Weyerhaeuser Opinion is Out

Posted by D. Daniel Sokol

PDf available here (Download 05-381_All.pdf).   I have not read the opinion yet, so my remarks are based on the briefs, which I read a while ago.  I think that the Court reached the right result.  I am suspcicious of predation claims unless the government is somehow involved in altering the competitive landscape through state owned enterprises (revenue maximization goal instead of profit maximization goal) or through various government imposed barriers or aids that artificially reduce marginal cost.  In a non-US setting, these issues play particular importance because of greater state intervention in the economy.  That is, I don't think that the Brooke Group test works in much of the rest of the world.  In this respect, the EU has done a better job in addressing state created distortions due to predation such as in the Deutsche Post abuse of dominance and state aids decisions.


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Apologies if this is a stupid question from someone at a distance from the legal field. However, my curiosity is piqued because of my wife's involvement in the finances of healthcare.

I wonder if the pricing regimen that enforced on healthcare providers might be affected by this ruling. When a particular customer accounts for half of the business across the entire industry, and is many times larger than any other customer, is that sufficient to constitute a monopsony? And since Medicare enforces a pricing and billing model, they effectively make it impossible for hospitals and other providers to sell their service any other way. This prevents other customers (insurance companies and private individuals) from accessing the system through any other model, and in fact forces them to subsidize underpayment by Medicare of many services.

Posted by: CWuestefeld | Feb 20, 2007 2:40:27 PM

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