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The Girl Scouts and Section 5

It turns out that the Girl Scouts price discriminate, i.e. they charge different prices for the same product in different parts of the country (HT: Knowledge Problem).   Rumor has it that demand for Thin Mints varies by region.  While the Girl Scouts concede that the introduction of the price discrimination scheme results, when coupled with  Girl Scout marketing efforts,  is tantamount to the evading pricing constraints imposed by current demand conditions.  No word on whether the Girl Scouts have hired antitrust counsel in light of the Commission’s pushing of this definition of actionable antitrust conduct in N-Data and Ovation (amongst other cases).  Of course, Girl Scout Cookie consumers need not fear Commission intervention because, at least under Section 5, the Girl Scouts will not also face private rights of action for treble damages all over the country, well, that is unless the plaintiffs bar figures out that it can use state consumer protection acts instead.   But that seems unlikely, right?  And really, the case for Commission action under Section 5 is fairly clear.   The welfare effects of price discrimination are notoriously difficult to measure empirically and, I mean, price discrimination sounds so bad doesn’t it?  This seems like the perfect case to rely on the Commission’s expertise in divining the anticompetitive effect imposed on consumers in the high demand regions and keep such a decision out of the hands of lay juries and generalist judges.  No doubt, the expertise will be required to interpret the “hot document” evidence like internal Girl Scout videos which teach the Scouts to sell more cookies and crush rivals with enthusiastic energy and persuasive sales techniques.  Antitrust experts are split on whether the scheme would also violate Section 2, but there is widespread consensus that a rumored sale of the Girl Scout Cookie business to a pharmaceutical firm would certainly violate Section 7.

Filed under: antitrust, federal trade commission, musings