Some Thoughts on Antitrust Regulations on US Pipeline Carriers: With a Special Reference to the Champlin Oil Cases

Abstract

Monopoly is a market structure where only one or a small number of firms have exclusive control over the pricing of a product. In this situation, competition over the free mobility of production factors is limited by manipulative constraints. Section 2 of the Sherman Antitrust Act, the most representative of its kind, stipulates thus: “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony.” For the Sherman Antitrust Act, a ‘big and bad’ firm is an illegal entity. Any monopoly power is willfully acquired and maintained. On the other hand, the Interstate Commerce Act takes all pipeline carriers as common carriers and applies its provisions to them, staving off monopolies from arising. About Champlin Oil Case Ⅰ(1946), the U.S. Supreme Court holds that Champlin’s operation is transportation within the meaning of 1 of the Act and that the statute supports the Commission’s order to furnish information. As to Section 19a of the Act, the Court holds that the statute is within the commerce power and does not offend the Fifth Amendment. As for Champlin Oil Case Ⅱ(1951) the Court holds, under Section 20 of the Act, that a subsequent order of the Commission is sustained, insofar as it requires Champlin to file annual, periodic and special reports, and to institute and maintain a uniform system of accounts applicable to pipe lines. Insofar as the order requires Champlin, under 6 of the Act, to publish and file schedules showing rates and charges for interstate transportation of refined petroleum products - which might force appellee to devote its pipe line, at least partially, to public use - it goes beyond what Congress contemplated when it passed the Act; and it cannot be sustained. This paper critically reviews the legal theories on which the final ruling is based. The author sees the ruling regarding Section 6 as having an undermining effect on its judicial precedents and to the intent of the Interstate Commerce Act.