Monopolization

Monopolization - www.swapnotes.com Monopolization Overview...

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Monopolization Overview §2 of the Sherman Act condemns “every person show shall monopolize…” In one sense, monopolization is concerned w/ Brandeis’ “Curse of Bigness” o We are wary of big firms in America During the 1 st half of the 20 th C. there was much flux in the judicial definition of ‘monopolization’ Conduct requirement o There must be some “exercise” of monopoly power…somewhat ambiguous as to what will constitute sufficient ‘conduct’ o Firms innocent of §1 violations may often be condemned under §2 There is a tension in §2 cases…you do not want to hamper a monopolist’s ability to innovate, but you do not want to allow exclusionary conduct which is aimed at eliminating competition Basic Requirements - US v. Grinnell (1966) (1) possession of monopoly power in the relevant market (2) the willful acquisition or maintenance of that power, as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident What Constitutes “Monopoly Power” The law of monopolization is directed at relative size in some properly defined mkt (Hovenkamp) o Absolute size alone will NOT be a violation of §2 Before a firm can be condemned for ‘monopolization’ it must be the dominant firm in the mkt “Market power” = power to output and prices above MC, and to make a profit doing so o “Monopoly power” = a large amount of market power
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Monopolization - www.swapnotes.com Monopolization Overview...

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