Monopolization Issues

• Pages: 177-194

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CHAPTER VI

MONOPOLIZATION ISSUES

A. Introduction

Section 2 of the Sherman Act addresses the unilateral conduct of

market participants. It specifically prohibits monopolization, attempted

monopolization, and conspiracy to monopolize. Its text provides that

“[e]very person who shall monopolize, or attempt to monopolize, or

combine or conspire with any other person or persons, to monopolize any

part of the trade or commerce among the several States, or with foreign

nations” is guilty of a felony and liable in a civil action.1

While some economists have characterized agricultural markets as

almost perfectly competitive,2 Section 2 monopoly claims have been

brought in the segment.3 Others have argued that certain agricultural

1. 15 U.S.C. § 2.

2. See, e.g., Paul L. Yde & Michael G. Vita, Merger Efficiencies:

Reconsidering the “Passing-On” Requirement, 64 ANTITRUST L.J. 735,

742 (1996) (illustrating perfect competition by discussing wheat farming).

3. See, e.g., Case-Swayne Co. v. Sunkist Growers, 389 U.S. 384 (1967)

(organization of orange growers and manufacturer of juices sued

association of citrus producers for antitrust violations); Be taseed, Inc. v.

U & I Inc., 681 F.2d 1203 (9th Cir. 1982) (sugar beet seed seller alleged

violations of the She rman Act’s proscription against tying a rrangement by

processor); Hunt-Wesson Foods v. Ragu Foods, 627 F.2d 919 (9th Cir.

1980) (antitrust action by food manufacturer against second food

manufacturer); Treasure Valley Potato Bargaining Ass’n v. Ore-Ida

Foods, 497 F.2d 203 (9th Cir. 1974) (individual potato growers and

bargaining associations brought action against potato processors for

violations of antitrust laws and defendants counterclaimed); Ploss v. Kraft

Foods Grp., 197 F. Supp. 3d 1037, at *20 (N.D. Ill. 2016) (businessman

alleged that Kraft Food Group Inc. unlawfully acquired monopoly power

in the market for wheat futures); Growers 1-7 v. Ocean Spray

Cranberries, 2014 U.S. Dist. LEXIS 61654, 2014 WL 1764533, at *1 (D.

Mass. 2014) (plaintiffs brought Section 1 and 2 claims Ocean Spray

Cranberries, Inc. and Ocean Spray Brands, L.L.C.); In re Southeast Milk

Antitrust Litig., 801 F. Supp. 2d 705, 724 (E.D. Tenn. 2011) (independent

178 Agriculture and Food Handbook

markets may be susceptible to monopsony power, the buyer-side

equivalent of monopolization.4

This chapter examines monopoly claims and how courts apply them

in the context of the food and agriculture industries. It provides a primer

on the elements of the monopoly causes of action and then briefly

describes the dynamics of the agriculture and food production sectors

that allow for, or act as an impediment to, monopolization. It also covers

monopsony power, which has special relevance in the agriculture

industry. Antitrust inju ry is an important and necessary element, which

often acts as a bar to otherwise valid Section 2 claims in the sector.

Finally, this chapter examines the elements and case law of the less

frequent attempted monopolization and conspiracy to monopolize claims.

B. Monopolization

To prevail on a monopolization claim, a plaintiff must establish that

the defendant (1) has monopoly power, (2) in a relevant market, and (3)

such monopoly power was acquired, enhanced, or maintained by the use

of exclusionary conduct.5

Monopoly Power

Monopoly power exists when a single firm has the power to control

prices or exclude competition in a relevant product and geographic

dairy farmers, independent cooperative members, and dairy farmers’

cooperative members filed suit against milk bottlers, dairy cooperative,

and milk marketing agencie s); In re Dairy Farmers of Am., Cheese

Antitrust Litig., 767 F. Supp. 2d 880 (N.D. Ill. 2011).

4. See, e.g., U.S. DEP’T OF JU STICE, COMPETITION AND AGRICULTURE :

VOICES FROM WORKSHOPS ON AGRICULTURE AND ANTITRUST

ENFORCEMENT IN OUR 21ST CENTURY ECONOMY AND THOUGHTS ON THE

WAY FORWARD 8 (2012), available at http://www.justice.gov/

atr/public/reports/283291.pdf (“Many participants specifically raised the

issue of monopsony power. . . . Participants contended that processors,

acting singly or in concert, have sufficient market power to depress the

prices of crops or animals below competitive levels.”).

5. Verizon Commc’ns v. Law Of fices of Curtis V. Trinko, 540 U.S. 398,

407 (2004).