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19 Ocean L. Memo 1 (1980)

handle is hein.journals/ocoaslme19 and id is 1 raw text is: Ocean and Coastal Law Center * School of Law - University of Oregon - Eugene 97403 l Ocea Law M emo Issue 9 Octber 1, 198 ANTITRUST LAWS AND THE FISHING INDUSy,, Just about everyone involved with fish- ing knows by now that the fishing industry is and has been under scrutiny by state and federal authorities looking for vio- lations of the various antitrust statutes. The United States attorney in San Fran- cisco in conjunction with a federal grand jury is conducting a broad investigation of the West Coast fishing industry. Sev- eral hundred subpoenas have been issued to processors and marketing associations requesting information about marketing practices over the last five years. Ag- grieved private parties are also showing interest in private enforcement of anti- trust laws. These developments have generated a lot of confusion about antitrust laws and how they limit certain activities in the fishing industry. This Ocean Law Memo attempts to clarify the situation by discussing the policy justifications for having such laws and by describing the relevant state and federal laws and their possible applicability to the fishing in- dustry. Economics of Competition Antitrust laws, both state and federal, are legislative enactments to control private economic activity. The basic aim of these laws is to preserve for society the benefits of free and open competition. To this end they condemn and provide punishment for activities which tend to restrict competition or restrain trade. Justifying the existence of these laws requires justifying their aim, the pre- servation of competition. Various argu- ments have been advanced supporting compe- tition as a desirable condition in the market place. Among the most convincing are: (1) Competition promotes efficiency and progress. Competitors must attempt to reduce their costs and improve their pro- ducts to maintTin their market positions. Competition also forces the movement of capital from areas of decreasing demand to areas of increasing demand. As certain business activities become marginally profitable because of competition for the available buyers, business capital will tend to move into areas or activities where competition is not so great. The winners theoretically are all of us in our role as consumers; we get a better product at a lower price. (2) Competition provides economic stabil- ity; competition induces continuous market adjustments through the economics of supply and demand. Ruinous plunges in market conditions are avoided by spreading recessionary effects out over time. (3) Competitive pricing tends to encour- age the distribution of income proportional to an individual's productive efforts. It helps insure that rewards (income) are distributed rationally according to success in meeting the needs of the market place. (4) Competition has value independent of its effects on the market place. The op- portunity to compete in a free market can be valued as an aspect of liberty; an opportunity to carry on business and suc- ceed or fail on the basis of merit. (5) Competition checks the power of giant corporations or combines to control market conditions. At the same time it helps minimize the effects of financial power in its social and political aspects. Our in- herent distrust of concentrated power is eased by the knowledge that competitive market conditions will, in most cases, help keep an economic power under control. To preserve these benefits of compe- tition certain conditions must be maintained in the market place. For any commodity or service: (1) There must be an appreciable number of Distributed by: OSU Extension Service' Sea Grant Marine Advisory Program, Corvallis, OR 97331 Issue 19 October 15, 1980

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