Ski Equipment Firms Yield to Antitrust Pressure

Two makers of ski equipment have caved in to threats from the Federal Trade Commission, partially surrendering their control over two important business decisions: celebrity endorsement contracts and employee hiring.

Both Marker Völkl and Tecnica Group make skis, boots and other equipment for sale in the U.S. One of their marketing techniques involves securing endorsements from well-known skiers. Back in 2004, the two companies decided they would both be more productive if they stopped bidding against each other for celebrities who had already endorsed the other’s products. In 2007, the companies expanded that thinking to employment, agreeing not to solicit the other’s current employees to jump ship.

Whose rights did these agreements violate? Nobody’s. Famous skiers don’t have a right to endorsement contracts from companies that don’t want to pay them. Nor do individuals with useful skills have a right to employment by ski equipment manufacturers who don’t want to hire them. As for the companies themselves, neither committed fraud, breach of contract, or otherwise violated the other’s property rights.

The FTC says the ski companies’ agreements were “anticompetitive,” but that’s just a sneak attack on profit-seeking. Competition is not an end in itself — it’s a method of achieving profitability, just as cooperation is a method of achieving profitability. In a free market, companies have an absolute right to choose whichever method they judge best suited to the circumstances. But by deeming cooperation to be “anticompetitive” and therefore illegal, antitrust law forbids companies to make profitability their standard of action.

Here, both companies judged that their battles over celebrities and employees consumed resources that could be better spent elsewhere. By choosing to cooperate in limited realms, they positioned themselves to compete more effectively in other areas. But under the Sherman Act of 1890, private businesses like Marker Völkl and Tecnica Group can be forced to surrender their business judgment and kowtow to Washington bureaucrats who produce nothing.

By what right?

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