Nice post on the subject. Kaplan never entering this market is fishy. By the boasting ads of all these companies, you would think they were the keepers of all standardized testing knowledge, and that they are all but going to show you the actual test before you take it. Nothing unusual here, just your standard "mattress" sales pitch. Its up the a consumer to cut through the bull and decide what is right for them.I found your post through a link from a libertarian hands-off reaction to your posting and the suit: Kipesquire. Though expressing many good points of concern, the post lacked a thorough and realistic market analysis, and a perspective on what effect the "agreement" has had on competition and more importantly the consumer. I have found that, as far as antitrust litigation goes, economic analysis can support both sides of any argument, thanks to our good friends, the economists. (See Richard Brunell's article for an excellent explanation of these issues "Appropriability in Antitrust: How Much is Enough?," 69 ANTITRUST L. J. 1, 39-40 (2001) ) You are dealing with prospective future business here, wrought with variables, a glorified form of fortune telling in these economic analyses. If this was easy to predict, I would be on a very long boat off the coast of Tahiti, fishing for (insert big tasty fish with a cool name here,) and you would be restocking the bathroom tissue holder with yet another roll of "Bennys." Kip would be doing something equally interesting, probably a lot closer to the above activities, rather than investment banking and worrying about lassies faire economics. If you want to see the anticompetitive effect, look at the market from the customer's point of view. Antitrust law was established to protect the customer. The allocation of resources, although a large factor in an antitrust analysis and, when efficient, a very nice benefit of a competitive market, is not the goal of antitrust. The reward and promotion of technological advancement is similarly a common issue in antitrust cases, but, thankfully, absent from the proper analysis of the legality of an agreement, merger, or a monopolist's actions. Efficiencies are traditionally worked out in the market, and the kind of reward system for innovation, often pitted ideologically against antitrust, is found in patent and copyright protection. Leave this to the economists and patent holders for now. Personally, I am glad that there is a body of law to check those parties who already have the consumer by the cajones and would leverage this market/monopoly power to prevent competition. Really? What good is allowing Barbri to keep that (theoretical) extra $1000 without any significant competition? Oh yeah, suuuure, they are going to use it to make a better course with it, and everyone will be happier, even Tiny Tim, if only the big bad government just didn't interfere with the natural order of things. Simply Baloney! If Barbri’s product is really $1000 better, let them earn it and prove it, rather than steal it from the public with a little "wink, wink, nudge, nudge say no more" act! And the market left to its own devices can come up with some fantastic little numbers, contracts of adhesion, child labor, hertz, slavery, Donald Duck. OK, Im grandstanding, going overboard, and getting a wee bit silly, but I'll take the protection of this minimally obtrusive law and to hell with anyone who says its too paternalistic or socialist or whatever rhetoric they can dig up. Illegally stop competition (on the merits of the product, the cost, whatever) and pay the price of liability later. By the time the case is settled/decided, most of the damage is done anyway, and extreme remedies, like breaking up the "Bells," will only be a employed in extreme measures. Only a sucker would feel bad for them, if you don’t see the wrong in the illegal horizontal agreement here, please explain this to me, and then, please don’t shake me down for “protection.”In the name of full disclosure, I just graduated from law school and JUST shelled out 2K for the basic Barbri course. This course consists of a bankers box full of books and a "lecture," that will be played on a VCR in front of me and 30 other key-clacking, money-leaking, lawyer hopefuls. No, this is not a "gee, poor law student" post with which prolifically whining law students fill the net at this time of year. Hey, I signed my name on the line, I get to take part in one of the largest "off the shelf" monopolies around if I actually pass the damn thing. But if there was a little competition in the mix here, who knows, maybe the man in the taped lecture would not be wearing a butterfly collar and bell bottoms. Maybe I could afford the "live lecture" and all the bells and whistles Barbri offers. Their market power is massive right now. If you are not familiar with it, tell your standard law student that you are preparing without "barbri." Invariably you will get a "Good Luck?" with that inflection to make it sound like you are certified not to take the course. Its the Windows of Bar review courses, and there isnt yet an Apple with enough market power to challenge it. I really wonder if they are doing all the security patch updates they need to (assuming they made a product that would intentionally need tons of security patches) I prefer a self-study method, but "baaaaa, baaaaaa," excuse me, I did sign up for Barbri rather than another course. Remarkably, you would think that shelling out 2-3K for materials would be enough for this exam? I havent yet met a person, who isn’t supplementing it with PMBR or Micromash, or something else. I see a lot of room for improvement to say the least. Doing the math, Bar/Bri is raking in the cash here, claw over foot, twice a year, for minimal work and the vigilant protection of their copyrights. Also, the customer service I received this morning makes me want to leggo my Eggos after I already ate them. Its turned into a rant. I’m one of the people you should be asking about the effects, not someone who can theoretically put 1000 dollars back into Barbri’s hands, and assume they will reinvest it. They will not, especially without competition. What they will most likely do with this money is use it to continue creating barriers to entry in a market that could really use an overhaul. Sure, Barbri is good. They better be good, they've had 35 years to practice and cost an arm and a leg. Looking at the stack of books I’m about to study, I doubt they have erased anything in those past 35 years in the name of being concise, but that’s part of it I guess. Kip and you both bring up a very good point, the lack of any obvious remedy to the situation. Cant make Kaplan offer a bar review, cant make Barbri do an LSAT course, and we cant go back to fix whenever this issue crossed the line from independent actions within two growing markets, to a conscious decision to stifle competition in these markets, thought both player clearly could slide on over into the other market without much effort. Also, breaking Barbri up into different operation divisions like a Bell or a Microsoft isn’t realistic from a business standpoint, given the MBE and similar state exams. Also, its not an issue like Microsoft, where the product itself is put together to cause the effect, through tying and other arrangement. Splitting Barbri would be just plain stupid and would amount to nothing more than kicking them in the groin to give some other competitors a momentary advantage they will not realize.
