Wednesday, March 14, 2007

Antitrust Action Against Barbers

After a number of barbershop owners in Tillicum (near Fort Lewis and McChord Air Force Base) all raised their prices for military haircuts from $6 to $7, the state began an antitrust investigation. Some barbers interviewed by the News Tribune say they planned their rate increase on their own. Said one, "My rent was going up on January 1. I thought it wouldn't hurt." State looks into price hikes of military haircuts, News Tribune, March 9, 2007.

Janelle Guthrie, a spokeswoman for the Attorney General’s Office, said these types of investigations are started by consumer complaints and "are not an attempt to bully anyone."

The AG’s office will accept antitrust complaints by telephone or online, she said.

While a barbershop investigation might seem unusual, Guthrie likened it to a consumer complaint that a group of gas stations raised their price four cents a gallon – all at the same time.
Lisa Kremer sent me this story, noting:
I took antitrust last quarter, so when I saw the story I thought, wow, that must have been a fun change of pace for the lawyers. But it's turned into a public relations nightmare. The paper has been full of letters every day criticizing the attorney general's office for wasting money on investigating $7 haircuts. My guess is the antitrust lawyers are not feeling too good right now.
Many consumer-oriented cases involve small amounts multiplied by many consumers -- for instance, when Netflix allegedly slowed the turnaround on its DVD mailings for heavy users (see settlement website), when Epson allegedly marketed ink cartridges that indicated they were empty and prevented printing even when there was ink in them (see settlement website), or when Microsoft allegedly violated California and federal laws in its volume license programs between 1995 and 2001 (see settlement website). But it's easier to sympathize with the hard-working barbers (often immigrants), trying to make a living 6 or 7 bucks at a time, than with the large corporations who are often defendants in such cases.

For more about antitrust investigations in Washington, see the Antitrust Division's website.

Update: The investigation stemmed from a couple of consumer complaints. Attorneys met with each of the barbers, along with an interpreter and Elliott Kim, a member of the state Commission on Asian Pacific American Affairs. The AG's office gave the barbers a warning but no penalties. It was clear that they did not know that agreeing to raise prices was illegal. Mr. Kim plans to translate antitrust information into Korean for use in the local Korean American press. No charges for barbers who fixed their prices, News Tribune, March 24, 2007. (Lisa sent me this update the day the article appeared, but that was during spring break and her message got lost in my email backlog.)

Photo: U.S. Army Museum of Hawai'i (Japanese-American soldiers during World War II).

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