Bad policy, pure and simple.(monopoly)

The Department of Justice announced a few weeks ago that Oracle's takeover of PeopleSoft violates antitrust law, stating that "we believe this transaction is anti-competitive--pure and simple." Ironically, in the same week the Supreme Court, in United States Postal Service v. Flamingo Industries, decided that the massive United States Postal Service is exempt from all antitrust laws. Yet anticompetitive behavior by the Postal Service is more harmful to consumers, competitors, and the overall economy than most private sector mergers.

The Postal Service enjoys a government-enforced monopoly over the delivery of all letters. Yet it competes in a wide and increasing array of businesses in which private firms are already active, including package and express delivery; it has recently ventured into selling a variety of retail merchandise and e-commerce services (most of which are unrelated to postal services).

A major concern is that the Postal Service will use funds from monopolized delivery services, where it holds customers captive, to underprice in businesses where it faces competition. Given that the final authority to set rates rests not with its regulator, the Postal Rate Commission, but with the Postal Service itself, that fear is justified. Moreover, the best available estimates (given the Postal Service's poor accounting data) indicate that it has earned losses on many products where it faces competition. Underpricing is thus nearly a certainty.

Various other concerns have arisen about the Postal Service's competitive activities. In addition to monopoly power, it is exempt from all taxation. It can borrow from the Treasury at government-guaranteed rates. It has the power of eminent domain and is excused from SEC disclosure requirements. It is not required to pay parking tickets ...