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Document Type

Article

Abstract

Around the world, the allocation of individual rights in the fisheries has proved to be a successful fisheries management tool. To date, the Individual Transferable Quota [ITQ] approach has been adopted for only a few fisheries in the U.S., although there is strong support for extending the approach to others. The basic goal of the ITQ approach is to create well-defined, exclusive property rights in a fishery, giving holders of those rights the incentive to fish efficiently and manage the resource for long-term sustainable yield. The property rights allocated are often percentage shares of the total annual allowable harvest or quota for the particular fishery. The transferability of these shares is key to the ITQ approach-being marketable, the shares will come to be owned by those who will most efficiently utilize them. Analysis of the ITQ approach, however, gives rise to the question of whether ITQ programs will have effects resulting in violations of U.S. antitrust law. The Sherman Antitrust Act, the Clayton Act, and the Federal Trade Commission Act all serve to protect consumers from anticompetitive activity. Once shares in a fishery are placed on the market, will trading result in single-owner accumulation of shares approaching monopoly in violation of these statutes? Will impermissible domination of competition and pricing result from concentrations of shares in the hands of a few? This Article examines the legal implications of ITQs with regard to antitrust law. It begins by identifying the benefits of the ITQ approach and considering the potential anticompetitive effects of an ITQ system. It then discusses the legal requirements for finding of monopoly, illegal price restraints and other impermissible restraints on competition. The Article concludes that ITQ systems can be designed to avert the possibility of excessive accumulation of shares in the hands of a few, and that such ITQ systems are unlikely to have effects that will result in antitrust violations.

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