Enforcement and Remedies

• Pages: 233-309

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CHAPTER VII

ENFORCEMENT AND REMEDIES

Enforcement of Section 2 in the United States comes from many

sources: the Antitrust Division of the Department of Justice (Antitrust

Division), the Federal Trade Commission (FTC), state enforcers, and

private plaintiffs. This chapter provides an overview of the scope and

limitations each has in bringing cases to remedy unlawful monopolization.

The chapter then addresses the substantial challenges in fashioning

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

approaches to remedies over the years.

A. 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.

1. 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 2.1 Like Section 1, Section 2 is a criminal

statute. It provides in relevant part:

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

1. 15 U.S.C. § 4. As explained below, the FTC’s jurisdiction to enforce §5 of

the FTC Act effectively gives the FTC the ability to enforce § 2.

234 Monopolization and Dominance Handbook

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 2.3 Criminal prosecutions

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

horizontal price fixing.4 The 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.5 Unlike per se violations of Section

1 of the Sherman Act, it often is not clear what conduct violates Section 2.

For this reason, the antitrust agencies have decided that criminal

enforcement of Section 2 violations is not necessary or appropriate.6

There are no Antitrust Division guidelines directed specifically at

monopolization. In September 2008, the Antitrust Division issued a

2. 15 U.S.C. § 2.

3. See ANTITRUST DIVISION, U.S. DEP’T OF JUSTICE, AN ANTITRUST PRIMER

FOR FEDERAL LAW ENFORCEMENT 4 (Aug. 2003), available at

http://www.usdoj.gov/atr/public/guidelines/209114.pdf (“Violations of

Section 2 are generally not prosecuted criminally. 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., HERBERT 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 § 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, 57 ANTITRUST 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 § 2 for civil § 2 enforcement, see

Mark S. Popofsky, The Section 2 Debate: Should Lenity Play a Role?, 7

RUT. BUS. L.J. 1 (2010).

Enforcement and Remedies 235

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,7 but

that report has since been withdrawn.8 Moreover, the FTC never endorsed

or issued the report, although FTC lawyers and economists helped to

prepare drafts. The Antitrust Division and the FTC have jointly issued

guidelines covering a variety of fairly specific topics that relate to issues.9

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 require 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.

Upon completion of its investigation, if the Antitrust Division

concludes that a company has violated Section 2, the Antitrust Division

may file a complaint and initiate civil litigation.11 In many cases, the

7. See ANTITRUST DIVISION, U.S. DEP’T OF JUSTICE, COMPETITION AND

MONOPOLY: SINGLE-FIRM CONDUCT UNDER SECTION 2 OF THE SHERMAN

ACT 2 (Sept. 2008) [hereinafter WITHDRAWN ANTITRUST DIVISION

REPORT].

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

Antitrust Division indicated more optimism about fashioning effective

remedies for violations of § 2 than had been reflected in the Report. Ass’t

Atty. Gen. Christine A. Varney, Antitrust Division, U.S. Dep’t of Justice,

Vigorous Antitrust Enforcement in this Challenging EraRemarks as

prepared for the U.S. Chamber of Commerce (May 12, 2009).

9. E.g., ANTITRUST GUIDE LINES FOR THE LICENSING OF INTELLECTUAL

PROPERTY (2017); HORIZONTAL MERGER GUIDELINES (2010); ANTITRUST

GUIDELINES FOR COLLABORATIONS AMONG COMPETITORS (2000); and

STATEMENTS OF ANTITRUST ENFORCEMENT POLICY IN HEALTH CARE

(1996). 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. §§ 1311-14.

11. See 15 U.S.C. § 1314(a).