Monopolization and Related Offenses
| Author | Ronan P. Harty |
| Pages | 223-354 |
223
CHAPTER 2
MONOPOLIZATION AND
RELATED OFFENSES
A. Introduction
Section 2 of the Sherman Act covers both unilateral activity, including
monopolization and attempted monopolization, as well as certain coordinated activity,
including monopolization by combination or conspiracy. The statutory text provides:
“Every person who shall monopolize, or attempt to monopolize, or combine or
conspire with any other person or persons, to monopolize any pa rt of the trade or
commerce among the several States, or with foreign nations, shall be deemed guilty of
a felony . . . .”1
This chapter begins with a discussion of the elements of a monopolization offense
and then covers other common claims and issues under Section 2.2 Monopolization
requires proof that the defendant (1) possesses monopoly power in the relevant market
and (2) has acquired, enhanced, or maintained that power by the use of exclusionary
conduct “as distinguished from growth or development as a consequence of a superior
product, business acumen, or historic accident.”3
B. Monopoly Power
The first element of a monopolization claim is the defendant’s possession of
“monopoly power.” Monopoly power under Section 2 traditionally has been defined
as “the power to control prices or exclude competition.”4 The U.S. Supreme Court has
reasoned that these two factors are intertwined and, at least in theory, should be treated
1. 15 U.S.C. § 2.
2. For an extensive discussion of monopolization issues, see SECTION OF ANTITRUST LAW,
MONOPOLIZAZTION AND DOMINANCE HANDBOOK (2d ed. 2021).
3. Verizon Commc’ns v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 407 (2004) (quoting
United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966)).
4. United States v. E.I. duPont de Nemours & Co., 351 U.S. 377, 391 (1956); see also Duty Free Ams.,
Inc. v. Estée Lauder Cos., 797 F.3d 1248, 1264 (11th Cir. 2015); Kolon Indus. v. E.I. DuPont de
Nemours & Co., 748 F.3d 160, 173-74 (4th Cir. 2014); Harrison Aire v. Aerostar Int’l, 423 F.3d 374,
380 (3d Cir. 2005); Geneva Pharms. Tech. Corp. v. Barr Labs., 386 F.3d 485, 500 (2d Cir. 2004);
United States v. Microsoft Corp., 253 F.3d 34, 51 (D.C. Cir. 2001) (en banc). There is some
uncertainty whether the Tenth Circuit requires proof of the ability to control prices and exclude
competition. See Shoppin’ Bag of Pueblo, Inc. v. Dillon Cos., 783 F.2d 159, 163-64 (10th Cir. 1986).
But see Four Corners Nephrology Assocs. v. Mercy Med. Ctr. of Durango, 582 F.3d 1216, 1220
(10th Cir. 2009) (stating the standard was “‘the power to control or exclude competition’” (quoting
Grinnell Corp., 384 at 570-71)).
224 ANTITRUST LAW DEVELOPMENTS (NINTH)
as one.5 Monopolization requires only that monopoly power exist, not that it be
exercised.6 In American Tobacco Co. v. United States,7 the Supreme Court held “that
the material consideration in determining whether a monopoly exists is not that prices
are raised and that competition actually is excluded, but that power exists to raise prices
or to exclude competition when it is desired to do so.”8
The determination of whether a defendant has monopoly power is a factual
question.9 Courts generally require that monopoly power be durable in order to provide
the predicate for a monopolization claim, whereas a transient, short-term market
position may be insufficient.10 Indeed, “the opportunity to charge monopoly prices—
at least for a short period—is what attracts ‘business acumen’ in the first place; it
induces risk taking that produces innovation and economic growth.”11
Although most cases concern monopoly power of sellers, a buyer may also possess
power over price and entry. This buyer power is referred to as “monopsony” power to
distinguish it from a seller’s monopoly power.12
5. See duPont, 351 U.S. at 392 (“It is inconceivable that price could be controlled without power over
competition or vice versa.”); Shoppin’ Bag, 783 F.2d at 163-64; Deauville Corp. v. Federated Dep’t
Stores, 756 F.2d 1183, 1188 (5th Cir. 1985).
6. Courts sometimes use the phrase “market power” as a synonym for monopoly power. See, e.g., Tops
Mkts. v. Quality Mkts., 142 F.3d 90, 97 (2d Cir. 1998). However, the Supreme Court has stated that
“[m]onopoly power under § 2 requires . . . something greater than market power under § 1.” Eastman
Kodak Co. v. Image Tech. Servs., 504 U.S. 451, 481 (1992); see Retrophin v. Questcor Pharm., 41
F.Supp. 3d 906, 916 (C.D. Cal. 2014) (stating that the monopoly power standard is “more stringent”
than the standard for a § 1 claim under Sherman Act); see also Novak v. Somerset Hosp., 2014 U.S.
Dist. LEXIS 138028, at *70 (W.D. Pa. 2014), aff’d, 625 F. App’x 65 (2015) (“Failure to establish a
defendant’s market power under § 1 of the Sherman Act . . . precludes a finding of monopoly power
for purposes of § 2 of the Act.”).
7. 328 U.S. 781 (1946).
8. Id. at 811.
10. See, e.g., Colorado Interstate Gas v. Natural Gas Pipeline Co., 885 F.2d 683, 695-96 & n.21 (10th
Cir. 1989) (holding that temporary ability to charge monopoly prices will not support § 2 claim);
Oahu Gas Serv., Inc. v. Pacific Res., Inc., 838 F.2d 360, 366 (9th Cir. 1988) (“A high market share,
though it may ordinarily raise an inference of monopoly power, will not do so in a market with low
entry barriers or other evidence of a defendant’s inability to control prices or exclude competitors.”);
Deauville Corp., 756 F.2d at 1190-91 & n.4 (finding that short-run control over price of first mall in
area did not constitute monopoly power); Apex Oil Co. v. DiMauro, 713 F. Supp. 587, 600-01
(S.D.N.Y. 1989) (finding that power over price for a few days is insufficient).
11. Verizon Commc’ns v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 407 (2004); see also
Four Corners Nephrology Assocs. v. Mercy Med. Ctr. of Durango, 582 F.3d 1216, 1222 (10th Cir.
2009); New York Merc. Exch. v. Intercon. Exch., 323 F. Supp. 2d 559, 568 (S.D.N.Y. 2004).
12. See, e.g., Weyerhaeuser Co. v. Ross-Simmons Hardware Lumber Co., 549 U.S. 312, 320 (2007);
United States v. Griffith, 334 U.S. 100, 108 (1948) (“Large-scale buying is not, of course, unlawful
per se. It may yield price or other lawful advantages to the buyer. It may not, however, be used to
monopolize or to attempt to monopolize interstate trade or commerce.”); Campfield v. State Farm
Mut. Auto. Ins., 532 F.3d 1111, 1119 (10th Cir. 2008) (rejecting claims of monopsony power where
alleged market was too narrow and included only windshield replacement or repair services for State
Farm claimants); Telecor Commc’ns v. Southwestern Bell Tel. Co., 305 F.3d 1124, 1133-34 (10th
Cir. 2002) (rejecting argument that monopsony is not actionable); United States v. Syufy Enters.,
903 F.2d 659, 663-71 (9th Cir. 1990) (rejecting claim that owner of majority of first-run movie
screens in Las Vegas had monopsony power).
MONOPOLIZATION AND RELATED OFFENSES 225
1. Definition of the Relevant Market
To determine whether monopoly power exists, it is necessary to define the relevant
market in which the power over price or competition is to be appraised.13 “Without a
definition of that market, there is no way to measure [a defendant’s] ability to lessen
or destroy competition.”14 Thus, the process and outcome of defining the relevant
market often can be the key to a Section 2 case.15
Plaintiffs bear the burden of defining a relevant market.16 A relevant market has
both product and geographic dimensions.17 Courts have held that defining a relevant
product market is a fact-intensive inquiry and that failure to properly plead such a
market “is rarely grounds for dismissal.”18 However, at the pleadings stage, a plaintiff’s
proposed relevant market must be “plausible,” and “must bear a rational relation to the
methodology courts prescribe to define a market for antitrust purposes—analysis of
13. Many courts have held that proof of a relevant market is an essential element of a monopolization or
attempted monopolization claim. See, e.g., Spectrum Sports v. McQuillan, 506 U.S. 447, 459 (1993);
United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966); Hicks v. PGA Tour, Inc., 897 F.3d
1109, 1120 (9th Cir. 2018) (“Plaintiffs must plead a relevant market to state an antitrust claim under
the Sherman Act, unless they assert a per se claim.”); Buccaneer Energy (USA) v. Gunnison Energy
219, 229 (2d Cir. 2006); Republic Tobacco Co. v. North A tl. Trading Co., 381 F.3d 717, 737 (7th
Cir. 2004) (rejecting “direct evidence of anticompetitive effects” as substitute for market definition);
PepsiCo v. Coca-Cola Co., 315 F.3d 101, 108 (2d Cir. 2002) (“In the absence of direct measurements
of a defendant’s ability to control prices or exclude competition, however, market power necessarily
must be determined by reference to the ‘area of effective competition’—which, in turn, is determined
by reference to a specific, defined ‘product market.’”) (citation omitted); Fraser v. Major League
Soccer, 284 F.3d 47, 61-62 (1st Cir. 2002). But cf. Re/Max Int’l v. Realty One, 173 F.3d 995, 1016
(6th Cir. 1999) (finding that where product market—real estate brokerage—had been established
and where geographic markets were determined to be local in nature but no specific local market
had been proven “with precision,” plaintiff could establish monopoly power through “direct
evidence of a monopoly, that is, actual control over prices or actual exclusion of competitors”). A
firm can be a monopolist only of a market in which it participates. See, e.g., Discon v. NYNEX
v. Rockingham Radiologists Ltd., 820 F.2d 98, 100, 104-05 (4th Cir. 1987); Mercy-Peninsula
Ambulance v. County of San Mateo, 791 F.2d 755, 759 (9th Cir. 1986); Spanish Broad. Sys. v. Clear
Channel Commc’ns, 376 F.3d 1065, 1075 (11th Cir. 2004).
14. Walker Process Equip. v. Food Mach. & Chem. Corp., 382 U.S. 172, 177 (1965).
15. For example, in United States v. Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945), the district
court had computed defendant Alcoa’s market share to be about 33 percent; after redefining the
relevant market, the Second Circuit computed Alcoa’s share to be over 90 percent and found it had
monopoly power. Id. at 424-25; see also United States v. Dentsply Int’l, 399 F.3d 181, 188-89 (3d
Cir. 2005) (finding relevant market for artificial teeth included dental dealers as well as dental labs—
as opposed to the only the labs); Broadcom Corp. v. Qualcomm, 501 F.3d 297, 315-17 (3d Cir. 2007)
(holding plaintiff had alleged viable technology product markets comprising the functions covered
by defendant’s patented technologies). But see Ohio v. American Express Co., 138 S. Ct. 2274, 2287
(2018) (finding that the trial court erred in defining the relevant market as only one side of a two-
sided transaction market).
850 (10th Cir. 2014) (Holmes, J., concurring).
17. Brown Shoe Co. v. United States, 370 U.S. 294, 324 (1962).
18. Todd v. Exxon Corp., 275 F.3d 191, 200 (2d Cir. 2001) (“Cases in which dismissal on the pleadings
is appropriate frequently involve either (1) failed attempts to limit a product market to a single brand,
franchise, institution, or comparable entity that competes with potential substitutes or (2) failure even
to attempt a plausible explanation as to why a market should be limited in a particular way.”).
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