Especially things incumbents did not face, but new entrants do face Predatory conduct of as an entry barrier Δ Secondary markets Monopoly of inputs, etc. – STEP 3: Conduct Generally Rule of Reason (Microsoft) – acts… reduce social welfare, and competitive acts… increase it” “Exclusionary be condemned as exclusionary, a monopolist’s acts must have an “To effect’” ‘anticompetitive harm the competitive and thereby harm consumers” “Must process to one or more will not suffice” “Harm competitors demonstrate that [Δ’s] conduct indeed has the requisite anticompetitive Π “must effect” can then a justification’ for its conduct” Δ “proffer ‘procompetitive can the justification Π If not, [Π] must demonstrate that the anticompetitive harm of the conduct “the outweighs the procompetitive benefit” is upon the effect of that conduct, not upon the intent behind it” “[F]ocus Refusal to Deal Standard: of monopoly power destroy threatened competition’ is a violation “Use ‘to of the to monopolize’ clause of § 2 of the Sherman Act” (Otter Tail) ‘attempt Can’t: Foreclose competition, gain competitive advantage, destroy competitor Must: Compete on merits (superior service, price, more efficient) a firm has been to exclude rivals on some basis other than Analysis: “If ‘attempting efficiency,’ it is fair to characterize its behavior as predatory” (Aspen citing Bork) Firms have no requirement to assist their rivals (Trinko) Insufficient assistance isn’t a cognizable refusal to deal claim Focus on harm to consumers Profit sacrifice Conduct that is economically irrational – notes this, requires it Aspen Trinko Refusal to deal after prior course of dealing notes this, requires it Aspen Trinko Institutional Factors (Trinko) Regulatory Structure More structure, less antitrust concern – Even with a savings clause Adequate Legal Remedy Will court have to police quality of service? – Concerns About False Positives Procompetitive reasons for behavior of High error costs? Δ? Essential Facilities Doctrine (MCI access to switch to connect LD calls) V. AT&T –
Especially things incumbents did not face, but new entrants do face Predatory conduct of Δ as an entry barrier Secondary markets – Monopoly of inputs, etc. STEP 3: Conduct Generally – Rule of Reason (Microsoft) “Exclusionary acts… reduce social welfare, and competitive acts… increase it” “To be condemned as exclusionary, a monopolist’s acts must have an ‘anticompetitive effect’” “Must harm the competitive process and thereby harm consumers” “Harm to one or more competitors will not suffice” Π “must demonstrate that [Δ’s] conduct indeed has the requisite anticompetitive effect” Δ can then “proffer a ‘procompetitive justification’ for its conduct” Π can the justification If not, “the [Π] must demonstrate that the anticompetitive harm of the conduct outweighs the procompetitive benefit” “[F]ocus is upon the effect of that conduct, not upon the intent behind it” Refusal to Deal Standard: “Use of monopoly power ‘to destroy threatened competition’ is a violation of the ‘attempt to monopolize’ clause of § 2 of the Sherman Act” (Otter Tail) Can’t: Foreclose competition, gain competitive advantage, destroy competitor Must: Compete on merits (superior service, price, more efficient) Analysis: “If a firm has been ‘attempting to exclude rivals on some basis other than efficiency,’ it is fair to characterize its behavior as predatory” (Aspen citing Bork) Firms have no requirement to assist their rivals (Trinko) Insufficient assistance isn’t a cognizable refusal to deal claim Focus on harm to consumers Profit sacrifice – Conduct that is economically irrational Aspen notes this, Trinko requires it Refusal to deal after prior course of dealing Aspen notes this, Trinko requires it Institutional Factors (Trinko) Regulatory Structure – More structure, less antitrust concern Even with a savings clause Adequate Legal Remedy – Will court have to police quality of service? Concerns About False Positives Procompetitive reasons for behavior of Δ? High error costs? Essential Facilities Doctrine (MCI V. AT&T – access to switch to connect LD calls)