Comment by SkyMarshal | Hacker News Reader

Comment by SkyMarshal | Hacker News Reader

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Grellas, what's your take on this Quora comment? In a nutshell, it's not illegal for collusion on the buy side, only the sell side:

Tarun Nimmagadda, Mutual Mobile Co-Founder, COO

http://www.quora.com/Who-are-the-Super-Angels-that-Michael-A...

"The article was a fun read, but it is a false claim that this is illegal. Collusion, price fixing, and dividing markets is only illegal on the selling side. Think about how people and groups are able to band together for purchasing power and special treatment when buying goods/services. Its not illegal.

Worth noting thought that if this price manipulation happened in relation to a company with over a 100 investors, SEC regulations would begin to apply and this behavior would be illegal"

That comment was made out of ignorance. Antitrust laws are by no means limited to sellers only.

Interesting, thanks.

"Collusion, price fixing, and dividing markets is only illegal on the selling side."

IANAL, but didn't Standard Oil got broken up largely for being a monopsony? In fact the first two complaints from the DoJ were about sell-side issues:

"Rebates, preferences, and other discriminatory practices in favor of the combination by railroad companies; restraint and monopolization by control of pipe lines, and unfair practices against competing pipe lines; contracts with competitors in restraint of trade; unfair methods of competition, such as local price cutting at the points where necessary to suppress competition; [and] espionage of the business of competitors, the operation of bogus independent companies, and payment of rebates on oil, with the like intent."

I know this was pointed at grellas, but I think this is a misunderstanding when we look at price fixing and collusion. The illegality of collusion is secretly forming agreements to benefit competitors at the expense of other parties. Words like defraud can succinctly help you understand whether it is illegal or not when looking at these agreements.

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