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Comment by alaties | Hacker News Reader

Collusion is when the parties coordinate on the price increases. If they both increase prices independently to achieve profitability, then I don't believe that to be illegal.

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Even if they didn't collude, they'd be under suspicion of it. Depending on how DOJ wind blows, that could be a big and expensive distraction.

No. That's not how price collusion works. If Delta airlines started charging for 2nd baggage, and after their announcement United/American/Southwest follow suit, that's not a price collusion if it wasn't predetermined secretly through implicit and explicit signaling among the airlines. The other airlines had option of either increasing their margins by adding new fee, or keeping 2nd bag free and hoping to make more money with increased volume (profit = unit margin volume). They are free to choose former or latter in our capitalistic setup. If there aren't any easily available substitutes, and you don't expect some new entrant to come and distrupt you, first option becomes much more lucrative. Especially if you have negative unit margins, since with second option - negative marginshigher volumes = lots of losses

> If Delta airlines started charging for 2nd baggage, and after their announcement United/American/Southwest follow suit, that's not a price collusion if it wasn't predetermined secretly through implicit and explicit signaling among the airlines.

I understand that.

That's why I said "suspicion". Something that seems too convenient and warrants some more poking and prodding and surveillance.

It's not as though folks colluding walk around waving "I am colluding, please investigate further" placards.

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