Confusion breeds confusion: puzzles pervade our monopolization cases. In United States v. Microsoft Corp., the D.C. Circuit held that a plaintiff need not prove what would have happened but for the defendant’s conduct; a few years later the same court appeared to dismiss the FTC’s case in Rambus Inc. v. FTC for failure to do just that. In McWane, Inc. v. FTC, the Eleventh Circuit held that monopolization requires only consumer harm, not competitor harm; in FTC v. Qualcomm, the Ninth Circuit indicated the contrary. The Second Circuit has held that monopolization liability is reserved for conduct lacking any legitimate business purpose; other circuits have suggested that intention is irrelevant. Some courts suggest that Section 2 always demands weighing harms and benefits; others disdain that approach. And so on.
The sorry state of monopolization doctrine has been an open secret in antitrust circles for many years. A few years ago, Thomas Lambert wryly pointed out that the “problem with Section 2” was that “nobody knows what it means.” Ten years before that, Einer Elhauge confessed that “[i]t is time . . . to acknowledge that the emperor has no clothes,” and that monopolization doctrine was just a “barrage of conclusory labels.” And twenty years before that, Steven Salop and Thomas Krattenmaker condemned monopolization’s “substantial disarray.”
For decades, we have managed with the help of two crutches. The first has been doctrine: a taxonomy of micro-rules for specific practices (exclusive dealing, tying, and so on) that rely on analogies to familiar markets and practices rather than first principles of monopolization law. The second crutch has been a robust presumption of lenity in close or novel cases, driven by fears of deterring vigorous competition, particularly in new or high-tech markets.
But the crutches are crumbling. Old taxonomies have lost their persuasive grip as scholars, legislators, and the public doubt whether markets defined by network effects, lock-in, platform dynamics, and other digital novelties should really be approached with rules forged in markets for steel, oil, and agricultural products. And the view that it is generally better to risk a bit too much private monopoly rather than a bit too much state action has fractured entirely.
The result is deep confusion, not just about the legality of many practices on the digital frontier, but about the standards courts, agencies, and businesses should use to appraise them. When can a dominant social network buy an emerging threat with competitive promise but an uncertain future? When can a dominant search engine give a hand up to its own services, and not those of rivals? When can a dominant chip manufacturer structure patent licenses in ways that tax and suppress rivals’ sales? To tackle these puzzles, we need precisely what we lack: a clear sense of the principles at the heart of the monopolization offense.
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