Why do we have antitrust laws?
The Supreme Court has called them "the Magna Carta of free enterprise", United States v. Topco Assocs., Inc., 405 U.S. 596, 610 (1972), and the Sherman Act "a comprehensive charter of economic liberty", Northern Pac. R.R. Co. v. United States, 356 U.S. 1, 4 (1958).
Sounds great. But what does it mean?
It doesn't mean, the Ninth Circuit reminded us last week, helping consumers.
The case involved a claim that people who make TV shows and people who put them on your TV harmed consumers by forcing them to buy junky channels along with the "must-have" ones. The complaint didn't allege — on purpose — that the bundling of bad stuff with tip-top material hurt competition for producing content.
The plaintiffs hoped that they "did not have to allege that potential competitors were foreclosed from the market". Brantley v. NBC Universal, Inc., No. 09-56785, slip op. at 7431 (9th Cir. June 3, 2011). But the district court disappointed them, and last Friday the Ninth Circuit affirmed the dismissal. As the panel explained:
[T]he plaintiffs here have not explained how competition (rather than consumers) was injured by the widespread bundling practice. The complaint included no allegations that Programmers' sale of cable channels in bundles has any effect on other programmers' efforts to produce competitive programming channels or on distributors' competition on cost and quality of service. In the absence of any allegation of injury to competition, as opposed to consumers, we conclude that plaintiffs have failed to state a claim for an antitrust violation.
Id. at 7438.
Did you get that? The bundling had to harm competition by stopping programmers from supplying channels. That consumers paid more than they would have in the absence of bundling didn't matter. That they had fewer choices didn't matter. That consumer welfare lost out didn't matter. Competition, although imperfect, didn't suffer — and that alone mattered.