Monopoly Power

• Pages: 43-73

43

CHAPTER III

MONOPOLY POWER

Having reviewed the economic principles and methods used to

analyze market power, Chapter III turns to how courts have approached

the same issues in creating legal standards for unlawful monopolization

practices. Chapter III begins with a discussion of how courts have defined

possession of “monopoly power” as an element of monopolization law.

The chapter next examines the difference between market power in an

economic sense and monopoly power, as well as how courts identify the

existence of monopoly power by defining a relevant market and examining

other evidence. Finally, Chapter III concludes with a discussion of how

courts have evaluated buyer-side monopoly power: monopsony power.

A. Monopoly Power as a Legal Requirement

Section 2 of the Sherman Act prohibits three types of conduct:

monopolization, attempts to monopolize, and conspiracies or

combinations to monopolize.1 Common to all Section 2 claims is a

consideration of whether a party has (or will have) “monopoly power,”

which the courts have defined as “the power to control prices or exclude

competition.”2

1. 15 U.S.C. § 2 (“Every 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, shall be deemed guilty of a felony . . .”).

2. See United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 391

(1956); see also ABA SECTION OF ANTITRUST LAW, ANTITRUST

LAW DEVELOPMENTS 223-24 (8th ed. 2017) [hereinafter ALD8]

(collecting cases). See Chapters IV and VI for further discussion of

monopoly power as an essential element of the § 2 offenses of

monopolization and attempt to monopolize, respectively. See also ABA

SECTION OF ANTITRUST LAW, MARKET POWER HANDBOOK: COMPETITION

LAW AND ECONOMIC FOUNDATIONS (2d ed. 2012).

44 Monopolization and Dominance Handbook

The specific role of monopoly power in each of these Section 2

offenses is discussed below.

1. Monopolization

To prevail on a monopolization claim, a plaintiff must show “the

possession of monopoly power in the relevant market . . . accompanied by

an element of anticompetitive conduct.”3 In other words, a defendant must

not only possess monopoly power, but also must have acquired or

maintained that power through anticompetitive means.

2. Attempt to Monopolize

Monopoly power also plays a significant role in attempted

monopolization claims under Section 2. A plaintiff must show three

elements to prevail on an attempted monopolization claim: “(1) that the

defendant has engaged in predatory or anticompetitive conduct with (2) a

specific intent to monopolize and (3) a dangerous probability of achieving

monopoly power.”4 Monopoly power is typically analyzed as part of the

third element, and while the methods of establishing a probability of

achieving monopoly power are the same as in a case of actual

3. Verizon Commc’ns v. Law Offices of Curtis V. Trinko, 54 0 U.S. 398, 407

(2004) (emphasis omitted) (citing United States v. Grinnell Corp., 384 U.S.

563, 570-71 (1966)). Courts have also required some causal connection

between the alleged anticompetitive conduct and the antitrust injury. See,

e.g., Austin v. McNamara, 979 F.2d 728, 739 (9th Cir. 1992) (noting

plaintiff must prove “defendants’ (1) possession of monopoly power in a

relevant market; (2) willful acquisition or maintenance (‘use’) of that

power; and (3) causal antitrust injury.”) (internal quotations omitted).

4. Spectrum Sports v. McQuillan, 506 U.S. 447, 456 (1993); see also ALD8,

supra note 2, at 325 (citing Duty Free Ams., Inc. v. Estée Lauder Cos., 797

F.3d 1248, 1263 (11th Cir. 2015); Kolon Indus. v. E.I. du Pont de Nemours

& Co., 748 F.3d 160, 177 (4th Cir. 2014); Díaz Aviation Corp . v. Airport

Aviation Servs., 716 F.3d 256, 265 (1st Cir. 2013); Mercatus Grp. v. Lake

Forest Hosp., 641 F.3d 834, 854 (7th Cir. 2011)). A plaintiff must also have

suffered “antitrust injury” as a result of the defendant’s alleged

misconduct. See, e.g., Schuylkill Energy Res. v. Pa. Power & Light, 113

F.3d 405, 414 n.9 (3d Cir. 1997) (“[W]hen an antitrust defendant’s conduct

cannot be linked to antitrust injury, the fact that the conduct may be

otherwise undesirable is not a concern of the antitrust laws.”).