Chapter VII. Enforcement and Remedies

• Pages: 235-286

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CHAPTER VII

ENFORCEMENT AND REMEDIES

A. Introduction

This chapter provides an overview of the scope and limitations of the

respective enforcement powers and evolving priorities of the public and

private enforcers of the antitrust laws in the United States—the Antitrust

Division of the Department of Justice (Antitrust Division), the Federal

Trade Commission (FTC), state enforcers, and private plaintiffs.

The chapter then addresses the substantial challenges surrounding

appropriate remedies for violations of Section 2, tracing the evolution in

approaches to remedies over the years. As the discussion shows,

questions about whether remedies are likely to be effective or even

affirmatively harmful have influenced development of liability rules for

monopolizing conduct.

B. Public and Private Enforcers

1. Public Enforcement

At the federal level, both the Antitrust Division and the FTC

prosecute monopolization and related offenses. In addition, state

regulators also may prosecute unlawful monopolization under both the

Sherman Act and state antitrust and unfair competition laws.

a. Antitrust Division

The Antitrust Division is the principal government agency charged

with enforcement of the antitrust laws. It has exclusive federal

government jurisdiction to enforce Section 2.1Like Section 1, Section 2

is a criminal statute. It provides in relevant part:

1. 15 U.S.C. § 4. As explained below, the FTC’s jurisdiction to enforce

Section 5 of the FTC Act effectively gives the FTC the ability to enforce

Section 2.

236 Monopolization and Dominance Handbook

Every person who shall monopolize, or attempt to monopolize, . . .

shall be deemed guilty of a felony, and, on conviction thereof, shall be

punished by fine not exceeding $100,000,000 if a corporation, or, if any

other person, $1,000,000, or by imprisonment not exceeding 10 years,

or by both said punishments, in the discretion of the court.2

As a practical matter, however, the Antitrust Division generally does

not criminally prosecute violations of Section 2.3Criminal prosecutions

are generally limited to hard-core offenses of Section 1 such as

horizontal price fixing.4The Antitrust Division’s practice of not seeking

criminal penalties for violations of Section 2 makes sense in the context

of Section 2 principles and jurisprudence.5Unlike per se violations of

Section 1 of the Sherman Act, conduct that violates Section 2 is not

always clearly defined, leaving firms with uncertainty as to the type of

conduct that may give rise to Section 2 liability. For this reason,

criminal enforcement has not been perceived as necessary or

appropriate.6

2. 15 U.S.C. § 2.

3. See ANANTITRUST PRIMER FOR FEDERAL LAW ENFORCEMENT 4,

available at http://www.usdoj.gov/atr/public/guidelines/209114.pdf

(“Violations of Section 2 are generally not prosecuted criminally.”). But

cf. id. (“Criminal prosecution [of monopolization] is warranted, however,

in circumstances where violence is used or threatened as a means of

discouraging or eliminating competition, such as cases involving

organized crime.”).

4. See, e.g.,H

ERBERT HOVENKAMP,THE ANTITRUST ENTERPRISE 64 (2005)

(“[T]he statutes do not explicitly distinguish criminal from civil

violations, although today the Antitrust Division limits criminal

prosecutions to naked price-fixing and market division agreements.”).

5. ANTITRUST MODERNIZATION COMMISSION,REPORT AND

RECOMMENDATIONS 294 (Apr. 2007) [hereinafter AMC REPORT]

(recommending no change to current practice of not seeking criminal

prosecution for violations of Section 2 because “unilateral . . . conduct . . .

often requires [a] more extensive factual inquiry to assess whether the

conduct is likely to benefit or harm consumers.”).

6. See, e.g., Charles F. Rule, 60 Minutes With Charles F. Rule, Assistant

Attorney General Antitrust Division,57A

NTITRUST L.J. 257, 259 (1988)

(“[W]hile we are relentless in pursuing criminal antitrust violations, we

are exceedingly careful to ensure that we prosecute only conduct that is

unambiguously anticompetitive and clearly illegal.”). For a discussion of

the implications of the criminal nature of Section 2 for civil Section 2

Enforcement and Remedies 237

There are no Antitrust Division guidelines directed specifically at

monopolization. In September 2008, the Antitrust Division issued a

detailed report on the law of monopolization, setting forth its

enforcement policies with respect to a number of specific practices and

providing its views on the proper default general test for monopolizing

conduct,7but that report has since been withdrawn.8The Antitrust

Division and the FTC have jointly issued guidelines covering a variety of

fairly specific topics9that relate indirectly to most abuse of dominance

issues.

The Antitrust Division’s civil enforcement of Section 2 of the

Sherman Act does not differ procedurally from its enforcement of

Section 1. An enforcement action typically begins with an investigation

into the potentially unlawful conduct. The Antitrust Division may issue

a civil investigative demand (CID) to assist in precomplaint discovery.10

A CID may seek the production of documents, oral testimony, or

answers to interrogatories. The Antitrust Division may issue a CID to

the firm or firms being investigated as well as other firms in the same or

related industries that may have information relevant to the investigation.

enforcement, see Mark S. Popofsky, The Section 2 Debate: Should Lenity

Play a Role?, 7 Rut. Bus. L.J. 1 (2010).

7. U.S. Dep’t of Justice, Antitrust Division, Competition and Monopoly:

Single-Firm Conduct Under Section 2 of the Sherman Act 2 (Sept. 2008)

[hereinafter Withdrawn Antitrust Division Report]. For a discussion of

the background of the report and the negative reaction to it by a majority

of the FTC, see Chapter VIII.D.1.

8. In withdrawing the report, the Assistant Attorney Ge neral in charge of the

Antitrust Division indicated more optimism about fashioning effective

remedies for violations of Section 2 than had been reflected in the Report.

Ass’t Atty. Gen. Christine A. Varney, Vigorous Antitrust Enforcement in

this Challenging Era, Remarks at the Center for American Progress 9

(May 11, 2009).

9. These include: FEDERAL TRADE COMMISSION,HORIZONTAL MERGER

GUIDELINES (2010); ANTITRUST GUIDELINES FOR COLLABORATION

AMONG COMPETITORS (2000); STATEMENTS OF ANTITRUST

ENFORCEMENT POLICY IN HEALTH CARE (1996); and ANTITRUST

GUIDELINES FOR THE LICENSING OF INTELLECTUAL PROPERTY (1995).

These guidelines may be found at

http://www.usdoj.gov/atr/public/guidelines.

10. A CID is a general discovery subpoena that is issued by the Assistant

Attorney General of the Antitrust Division pursuant to the Antitrust Civil

Process Act, 15 U.S.C. §§ 1311-1314.