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Antitrust Magazine

Volume 38, Issue 1 | Fall 2023

Best Practices for Trying a Section 2 Case

Ian Thomas Simmons, Doug Douglas Melamed, Bonny E Sweeney, Christopher Yoo, and John Roberti


  • This is a transcript of an interview moderated by Ian Simmons; Ian interviewed Doug Melamed (Stanford Law School), Christopher Yoo (University of Pennsylvania Law School), Bonny Sweeney (U.S. Department of Justice) and John Roberti (Cohen Gresser) about best practices in trying a monopolization case.
Best Practices for Trying a Section 2 Case
Daniel B Begiato via Getty Images

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Edited for publication.

Wednesday, August 16, 2023

Ian Simmons: Hello, everyone. My name is Ian Simmons and I’m a Co-Chair of the O’Melveny & Myers’ Antitrust Group. We are pleased to present to the readership of Antitrust, a panel discussion that originally took place on March 30th of 2023, at the ABA Antitrust Law Section Annual Spring Meeting. The panel was entitled “Trying a Sherman Act Section 2 Case: Best Practices.” The panel was well received and the ABA Antitrust Magazine asked the panelists if they could replicate the discussion.

It is my distinct privilege to introduce the panelists here today. I will start with Bonny Sweeney. Bonny should be well-known to the readership. She is Senior Litigation Counsel at the U.S. Department of Justice’s Antitrust Division. Bonny joined the Justice Department’s antitrust trial team just over a year ago, in July of 2022. She was previously a Partner in the San Francisco office of Hausfeld. Bonny is a truly accomplished antitrust trial lawyer. She has represented clients in some of the most significant antitrust cases in the United States over the past twenty years. She served as a co-lead counsel on behalf of a class of merchants in In re Payment Card Interchange Fee and Merchant Antitrust Litigation, Eastern District of New York, a sprawling litigation against the world’s largest credit card companies. Bonny is currently a member of the trial team for the Department of Justice in a very significant case in the District of Massachusetts where the government challenged the alliance between JetBlue and American Airlines. The court in that case rules for the government, and the matter is currently on appeal.

It is also my distinct privilege to introduce our second panelist, Doug Melamed. Doug, it is I think no overstatement to say, is a legend in antitrust law. He served at Stanford Law School as Professor of the Practice of Law from 2014 until 2022 and has been Scholar in Residence at Stanford since then. From 2009–2014, Doug served as Senior Vice President and General Counsel at Intel Corporation where he was responsible for overseeing Intel’s Legal and Government Affairs and Corporate Affairs departments. Prior to joining Intel in 2009, Doug was for many years a Partner in the D.C. Office of Wilmer Hale, a global law firm that we are all familiar with. He made his mark on antitrust cases, such as In re Rambus and several others. Significantly, from 1996–2001, Doug served in the U.S. Department of Justice’s Antitrust Division as Acting Assistant Attorney General, and before that, as Principal Deputy Assistant Attorney General. Doug had a significant imprint and influence in the last significant DOJ monopolization case to be tried, United States v. Microsoft.

Our third panelist is Christopher Yoo. Christopher is the John H. Chestnut Professor of Law, Communication, and Computer & Information Science, and is the Founding Director of the Center for Technology, Innovation, and Competition at the University of Pennsylvania Carey Law School. Christopher has emerged as one of the world’s leading authorities on law and technology, and he is one of the most widely cited scholars on administrative and regulatory law as well as Intellectual Property law. He has authored five books and over 100 scholarly works. His major research projects include investigating innovative ways to connect more people to the internet, engaging in a comparative law analysis of antitrust law/competition law in China, Europe, and the United States, and analyzing the technical determinants of optimal interoperability in high-technology industries. Before entering academia, Christopher served as law clerk to Justice Anthony Kennedy in the United States Supreme Court and prior to that, to Judge A. Raymond Randolph in the U.S. Court of Appeals for the D.C. Circuit. So, welcome, Christopher.

Our fourth and final panelist is John Roberti. John is a Partner at Cohen & Gresser here in Washington, D.C. He has been practicing twenty-nine years in antitrust litigation advising clients on a wide variety of antitrust issues, monopolization issues, cartel issues, and he is an alumnus of the Federal Trade Commission where he tried monopolization cases. John is regularly recognized as a leading antitrust lawyer by Chambers, The Legal 500, Who’s Who in Competition, Benchmark Litigation, and as a rising litigation star. The “rising,” I’ll say just in jest, I assume was from several years ago. John is also very, very active in the ABA Section of Antitrust Law, and he is currently the Technology Officer for the Section.

Welcome, Bonny, Doug, Christopher, and John.

Before I put the first question, which will start with Doug, I just want to make a couple of preliminary observations.

The Assistant Attorney General at the Antitrust Division has said that “We are in a one-in-a-century inflection point in terms of the reach of corporate power,” and he has admitted that the Antitrust Division is “claiming a mandate to update and adapt our antitrust enforcement to address new market realities.”

FTC Chairwoman Lina Khan, likewise told reporters that her agency would no longer invest in drawn-out settlement negotiations with parties seeking merger clearances or resolving dominance cases, but would instead focus resources on litigating those cases.

Former Deputy Assistant Attorney General Richard Powers made waves when he announced that the Antitrust Division would not shy away from bringing criminal monopolization cases in the right circumstances.

These policymakers are not limiting their ambitions to just filing more cases. Instead, today’s antitrust enforcers aim to expand the ambit of antitrust concern beyond the criteria that dominated jurisprudence over the last half century—price, output, and quality. The new guard contends that a myopic focus on those criteria and the consumer welfare standard they embody is not only inconsistent with statutory and case law origins, but that it also gave rise to decades of underenforcement, an inordinate concern with ‘false positives,’ a legal and economic quagmire in the case law, and a systemic neglect of competitive dimensions that resist measurement or quantification. Antitrust law enforcement has to adapt, the enforcers say, to remedy the sins of the past and to ward off the insidious competitive problems of the future.

Let me start, if I could, with Professor Melamed. It is hard to look at the news these days without seeing stories about monopolization cases. We have three cases relating to Google that will be tried within the next several months; we have cases against Meta; there are cases against Tesla, private cases. Doug, why are we seeing this renewed interest in monopolization antitrust litigation?

Douglas Melamed: I think it is really a confluence of a number of factors. There is a broad populist sentiment in general in the society on both the right and the left which distrusts concentration of power of almost any type. There is increasing awareness of and dissatisfaction with unequal distribution of wealth and economic power. There is an increasingly widespread view supported by some academic research that antitrust enforcement has been too lax over the past twenty or forty years, depending on how you look at it. And there is a particular unease, I think, about the large digital platforms, which are consumer-facing and increasingly important to almost everyone’s lives and are seen as mysterious black boxes that implicate privacy and, on the right, concerns about censorship; and those concerns have been exacerbated by the recent concerns about artificial intelligence.

There are a number of features of the platforms that I think are important and not talked about a lot. The digital platforms are now the dominant sources of communications and media. U.S. antitrust law, going back to the 1930s, has I think been especially aggressive in applying antitrust laws to the then-dominant communications and media platforms, whether they were the motion picture theaters, the broadcast television networks, cable television, or now the internet. I think all those factors, and perhaps others as well, come together to create a moment when attention is focused on big institutions and perceived economic power.

Ian Simmons: Bonny, would you like to speak to this question of why we are seeing this proliferation of monopolization cases and an apparent confluence of concern for dominance both on the right, such as from Senators Hawley and Cruz, and on the left, such as from Senators Warren and Klobuchar? Would you like to address that and pick up on anything Doug said?

Bonny Sweeney: Yes, thank you.

I would just like to start by saying that the views I express do not purport to reflect those of the U.S. Department of Justice and do not indicate what the Department would do in any particular situation.

I would agree with Doug that a whole confluence of factors has led to this increased interest in the enforcement of the antitrust laws at the private level, at the state level, and at the federal level. I think it is in response, in part, to underenforcement of the antitrust laws over the past thirty years; and certainly, as Doug pointed out, there is a concern about the power of very large digital platform firms. But, it is not just the large digital platform firms that are subject to increasing antitrust scrutiny. We see increased antitrust enforcement all over the economy, and it is a welcome development.

Ian Simmons: Christopher, Jon Baker’s book, The Antitrust Paradigm—just picking up on something Bonny mentioned—talks about the ubiquity and prevalence of market power in many sectors of the American economy. Do you agree with that observation; and does that, just picking up on the idea of why monopolization litigation is now de rigueur, explain why are we seeing so much of it? Do you think there is indeed a market power problem that may be at the root of this?

Christopher Yoo: There are many ways to frame why antitrust is receiving much more attention right now.

One way is to frame it in terms of market power. Another way is to frame it in terms of innovation. Increasingly, instead of focusing exclusively on static efficiency issues—such as output, quantity, price, and quality—which reallocate existing resources to reach the production possibility frontier, antitrust law is being asked to promote dynamic efficiency by promoting the development to push that frontier out. To date, however, the tools we have developed have been better suited to evaluate static efficiency than to evaluate dynamic efficiency.

A lot of this can be tied, for example, to the debates that happened in the 1950s, 1960s, and 1970s, where we moved away from the structure-conduct-performance paradigm, under which we viewed size as inherently suspicious, in favor of an effects analysis. At that time, we confronted numerous proposals to return to the structuralist paradigm, as evidenced by the Neal Commission, the Areeda and Hovenkamp no-fault monopolization proposals, Philip Hart’s proposed Industrial Reorganization Acts, and President Carter’s National Commission for the Review of Antitrust Law and Procedures. All of these efforts proposed reevaluating whether we should make persistent monopoly power or persistent market size a basis for liability even absent some form of exclusionary conduct.

Congress and the courts have never took that step, primarily because when you take innovation into account, pure size is ambiguous. Size can be the result of anticompetitive acts. It can also be the result of successful competition on the merits.

One of the reasons Congress never enacted the legislative changes that were proposed in the 1970s was because of the concern that it would reduce firms incentive to innovate by penalizing firms that innovated too well.

And so, we end up in a familiar place in antitrust law, which is that when confronted with ambiguous conduct, we look for filters that separate out the conduct that is anticompetitive and deserving of antitrust sanction from the kind of procompetitive conduct that antitrust is looking to encourage.

My hope is that we will keep working on more sophisticated understandings, evidentiary requirements, and questions of proof that will successfully separate the wheat from the chaff in ways that allow us to curb the problems without sacrificing the benefits of innovation.

Ian Simmons: Very interesting, Christopher. If I could just quickly follow up—I want to bring John into the conversation slightly shifting gears to private litigation—Christopher, an interesting and intriguing notion about the antitrust community being besotted perhaps with market shares or size.

The D.C. Circuit in the Microsoft case—and it’s incredible that now it’s twenty-two years ago we had the last significant Department of Justice published opinion in a monopolization trial on the merits—the D.C. Circuit there said: “Once a product or standard achieves wide acceptance, it becomes more or less entrenched. Competition in such industries is ‘for the field’ rather than ‘within the field,’” and it cites Harold Demsetz [Why Regulate Utilities?, 11 J.L. & Econ. 55, 57 & n.7 (1968)].

Do you believe the ubiquity of the “winner take all” phenomenon is at the root of the Section 2 enforcement agenda and why we are seeing perhaps a coalescence of the left and the right. Is this something that is empirical or is this just fodder for conferences?

Christopher Yoo: I think that concerns about winner-take-all markets are often overstated. Many things that look extremely threatening in the here and now in retrospect end up not being perhaps as concerning as we thought.

For example, I started teaching law around the time of the AOL/Time Warner merger, which at the time was widely regarded as the end of history, when it was really just the end of $240 billion in Time Warner shareholder value. AOL looked like this behemoth that was unstoppable, and they were just basically sold for a song. In considerably less than a generation, they were a shadow of their former self.

When you think about even Facebook, if we were talking about them even just a few short years ago, we would perhaps be expressing stronger concerns about their market position than we do now, as we would also with, say, Twitter.

We can also cite other examples pointing in the other direction. Courts once assumed that MySpace was a monopoly. When Susan Crawford wrote her book, Captive Audience, in 2013, she speculated whether Netflix would still exist by the time the reader was reading her book. Such pessimism seems strange now that Netflix has turned out to be such an obvious success, but at the time Netflix was transitioning from mail to online distribution, nothing was certain. And even now, it is facing much stronger competition from other streaming platforms.

In short, I think it can be a mistake to be too focused on the here and now. Instead, we should make sure to take the long view with the understanding that things can change rather rapidly.

But, at the same time, I think there is a wonderful question about whether the nature of competition has changed. People often talk about network effects as if they inevitably lead to “winner take all” markets. We often forget that when multihoming is possible, you are not choosing only one network; you can actually participate in multiple ones. It is thus a mistake to equate network effects with ‘winner-take-all’ markets,” and we learn that features like multihoming and gateways between networks can actually cause those things not to happen. Indeed, there is a variety of other proprietary solutions and aspects of private ordering that can dissipate a lot of those problems.

At the same time, ever since Joseph Schumpeter talked about the “gales of creative destruction,” economists have considered whether certain industries, particularly high-tech industries, will not see multiple actors competing within a market for customers but, rather, a succession of monopolists that will dominate a market of time because of scale economies or some other market feature.

I have always been inspired by a chapter that Tim Bresnahan wrote before he became Deputy Assistant Attorney General and chief economist during the Microsoft case, in which he said that network effects made it inevitable that there would be a large operating system monopolist, whether its name was Microsoft or not. When that is the case, you will see two forms of competition: one is the different dominant players of the time trying to take over each other’s territory by rearranging the vertical chain or production, the other is the kind of competition you mention, Ian, the Schumpeterian idea of the next big dominant invention that allows another player to displace one of those levels.

If so, antitrust law can either increase the level of incremental innovation or accelerate the arrival of the next big change. His reaction was that market seemed to be doing just fine in promoting incremental innovation, and he was skeptical of the government’s ability to predict what the next big thing would be in order to bring it about faster before it was already settled, at which point the government would simply be jumping on a bandwagon that was already moving.

So, it is an interesting question to me that someone as empirically based and enforcement-friendly as Tim Bresnahan, having served as the government’s expert, took very seriously the idea that this type of competition may emerge in the new economy.

More fundamentally, your question raises a great point: just because something could happen, doesn’t say much about the likelihood that it is happening or will happen. As a result, antitrust must make sure to employ terms of proof and evaluation that make sure that the alleged anticompetitive outcome is actually happening, the type of competition we are in, and how should we incorporate that into antitrust law. I would say that we have a lot more questions than answers at this point in that area.

Ian Simmons: Having more questions than answers seems to be an occupational hazard with antitrust.

A fascinating point you make about multihoming is not synonymous necessarily with lock-in, but perhaps we can return to that.

Let me bring John into the conversation, and then I would invite Doug and Bonny to weigh in on anything that has been said to date. John, how if at all, has the government’s renewed interest in antitrust affected private actions either in quantity or quality?

John Roberti: It’s a really good question. I take issue slightly with how we are characterizing the government’s interest in monopolization. We talked about forty years of underenforcement, and that has been a mantra. We hit the low point with the decision in the Trinko case, which is actually a narrow holding that is being interpreted as a sweeping rule because of its extensive dicta that muses on when a refusal to deal with a competitor is actionable.

The true bottom point for enforcement came with the issuance of the DOJ’s Section 2 Report in 2008, which was rapidly withdrawn when the Obama Administration took office. This signaled a policy change and a willingness to view Section 2 more broadly. The government was interested in monopolization cases during the Obama Administration and the Trump Administration for that matter; it’s just—going back to the title of the panel—trying those cases became very, very difficult. So the renewed interest of the government isn’t really a renewed interest in monopolization; it’s a renewed interest in trying the cases. That’s why you bring in people like Bonny Sweeney here to try cases, right?

Having the government show the courage to try a monopolization case encourages the private bar to do it as well, and in many ways the private bar has been out ahead of the government in bringing monopolization cases and thinking about these issues.

So I’m not sure there is necessarily a cause and effect between the government’s recent cases and the cases being brought by the private bar. I think there has been a recognition among enforcers for years that the monopolization standards have been too narrow. I think to the extent that this is a new government revelation it has to do with the fact that this is a new set of enforcers who just, for whatever reason, aren’t nearly as timid about losing cases.

Ian Simmons: Fascinating.

Before I slightly shift gears a little bit to go to a doctrinal question, Doug or Bonny, do you want to react to any of the comments thus far?

Douglas Melamed: I completely agree with John and with the agencies, and even going back to some of the folks in the Trump Administration—that litigation of government cases is better than settlements with conduct remedies and even in many cases structural remedies, for lots of reasons.

The most important one—I certainly felt this way during the Microsoft case—is that the government can deal with only the tip of the iceberg. The antitrust laws apply to almost all commercial conduct that affects interstate commerce, so the real contribution of the Justice Department is not to get an injunction against Firm X or Firm Y; it is to establish good legal principles that, armed with the private bar and treble damages, can be effective deterrents going forward.

Ian, I would like to comment briefly on Christopher’s comments about innovation and network effects.

First of all, yes, when you focus on innovation rather than the static welfare effects of avoiding deadweight loss, you are getting into more complicated economics. It’s almost certainly true that the prospect of monopoly power ex post can be an ex-ante incentive to investments in innovation, but I don’t think one can conclude from the economic literature that possession of monopoly power promotes innovation. There is some support in Schumpeter and more recent work that size promotes innovation, both because it gives the potential innovator scale and because it increases the ability of the innovator to appropriate the fruits of its innovation if intellectual property and other protections are not sufficient for that purpose; but that is different from market power.

More broadly, Christopher was talking about network effects and dynamic welfare as opposed to static welfare. In effect, as I understand it, he was talking about a broader and somewhat different notion of economic welfare. I would like to make two comments about that.

First, I think the current debate is not really about economic welfare. I think the current debate is about whether economic welfare or something else, some more Jeffersonian vision, should be driving antitrust.

My second comment concerns the question whether antitrust should promote competition for the market or in the market. Antitrust law is not industrial planning. It rests on the contrary premise that competition and the market should determine the direction of the economy. So antitrust law is limited to prohibiting bad conduct that harms competition, and the question is, “What is bad conduct?” It seems to me that bad conduct is conduct that without some justification interferes with market forces that would, among other things, let the market decide when and where competition for the market is a superior investment rather than competition in the market.

Ian Simmons: Good thoughts Doug, thank you. Christopher, you have your hand up. Please proceed.

Christopher Yoo: There is a theoretical literature suggesting that firms with market dominance may be more innovative, exemplified by Gilbert and Newbery’s work on rent dissipation incentives.

There is also a very large empirical literature on the subject. You mentioned market size—that’s really the Arrow versus Schumpeter debate where Arrow says smaller firms are more innovative and Schumpeter says larger ones are more innovative.

But there is actually empirical literature that measures that not only in size but in terms of market share. The relationship between market concentration and innovation has been called the second most heavily studied question in industrial organization, and I think every survey that I have read has really said, “This literature is inconclusive”—not inconclusive because you don’t get results, but rather inconclusive because you get too many results. The relationship is not a simple one between both size and innovation and concentration and innovation, and there are disputes over how you measure innovativeness; but there are usually some other factors brought in, and we haven’t really settled out what they are.

But the one thing that I think you are hinting at, Doug, which I think is important too, is even when you take innovation seriously, we have to think of it as a tradeoff. Bill Baumol has said that the fact the long-run benefits from dynamic efficiency amortize over time makes them inherently more important.

I think a more balanced approach would really treat innovation as a tradeoff that tolerates short-run static efficiency losses in order to obtain long-run dynamic efficiency gains, as is often talked about in patent law. This tradeoff must be calibrated properly to make sure consumers benefit. It is not always going to go on the side of static efficiency, and it is not always going to go to the side of dynamic efficiency. We have to figure out a framework to bring both sides together.

Doug’s comment about there being no benefit right now from market power is reminiscent of the debate over the no-fault monopolization proposal that Areeda and Turner advanced in the 1970s. The problem is that firms decide whether to invest in innovation long before they know what the outcomes are. So, the real question from an innovation standpoint is: What would penalizing a firm simply for holding monopoly power do to the incentives to innovate ex ante when people are undertaking the investments and are forecasting their expected returns. If firms can be penalized simply for being large, even innocent firms will necessarily have to adjust their prediction by what possible antitrust liability they might face if they are too successful at competing on the merits. This penalty on innovation is one of the reasons antitrust law has never adopted no-fault monopolization and why monopolization has always included an exclusionary conduct element to make sure that liability attaches only when a firm does something to obtain or to maintain a monopoly beyond what would normally be determined competition on the merits to serve as a filter to separate procompetitive from anticompetitive outcomes.

Ian Simmons: I want to come back to all of this—innovation, how do we measure it; injury; and exclusionary conduct, how do we define it—and we’ll be coming to that in just a minute.

But before we progress, I want to ask Bonny: Doug alluded to the debate about the objectives of antitrust and he mentioned the consumer welfare standard. Tell us what is the consumer welfare standard and is it the appropriate standard?

Bonny Sweeney: We have been talking about underenforcement of the antitrust laws over the past thirty to forty years, and part of that has to be attributed to the rise of the consumer welfare standard as it was popularized by Judge Bork in The Antitrust Paradox in 1978.

Remember that the consumer welfare standard has never been adopted by the U.S. Supreme Court—it has been mentioned by it—but, the Court has never embraced it. Nevertheless, this standard has been used by lower courts to justify a narrow view of antitrust enforcement that is focused on short-term price and output effects. I think that has helped lead to underenforcement.

This focus on short-term price effects on consumers ignores other benefits of competition—such as innovation, quality, and variety—and it also tends to leave out certain groups, like the groups who purchase inputs for their products—workers, farmers, and small suppliers, for example.

There is a recent example of this in the Ninth Circuit. In a case called, the district court dismissed a lawsuit by one competitor against another competitor on the ground that the plaintiff had not adequately alleged antitrust injury because it had not alleged direct harm to the “ultimate consumers.” Although the competitor alleged that it was injured by the anticompetitive conduct (in addition to alleging harm to competition), the court held that was not enough.”

The Ninth Circuit reversed. The Department of Justice submitted an amicus brief in that case. The Ninth Circuit held that a business that uses a product as an input to create another product is a consumer of that input for antitrust purposes.

This decision illustrates how the consumer welfare standard has been, perhaps, misunderstood, and certainly construed in a way that is very limiting in antitrust enforcement.

Widespread recognition of the shortcomings of the consumer welfare standard is one of the reasons why we are seeing greater enforcement across the board in antitrust.

Ian Simmons: John, do you agree with Bonny that is perhaps at the root of what I think you identified as chronic underenforcement over the past several decades of Section 2? Do you think the consumer welfare standard has been one way or another at the root of that?

John Roberti: Yes. I take Bonny’s last point to be really important, which is it’s not just the consumer welfare standard; it’s the very, very narrow view of what is consumer welfare.

Imagine a vertically integrated healthcare company that drives its downstream competitors, say community pharmacies, out of business by under-reimbursing them. In a way, that is good for consumers because consumers are paying lower prices, but the consumers also lose the quality that might come with being able to go to somebody who is going to spend time with them and talk to them about their medication as opposed to getting their medication in the mail.

I think the narrow view of the consumer welfare standard is that a lot of defendants would suggest is “Tough luck if we lose the community pharmacies, that’s okay, because we’ll have lower prices.”

I think that view is incorrect as a matter of law. As a practical matter, however, if you want to see additional antitrust enforcement, you cannot be slavish to short-term price and output effects.

Ian Simmons: Let me try to merge my first line of questions to the panelists, and whoever wants to go first can go first on this. With the increased interest in monopolization cases and consumer welfare—we want low prices, lots of products, and good quality—we see the antitrust cases against the high-technology firms, and many of their products are free to use—Meta’s products; or Google search, I don’t pay Google to type on that search bar. What is the competition problem, monopolization problem, with industries with free products?

Douglas Melamed: The Microsoft case was about efforts taken by Microsoft to undermine the competing Netscape browser. Both that browser and Microsoft’s browser were free—at least free in the sense that that term is normally used, meaning distributed to consumers with a zero or nominal dollar price.

Of course nothing is free. Google is not free—I give them time, attention, and data. So in one sense it is misleading to talk about free goods.

But the larger reason that “free” is not a safe harbor is the idea that, if there is not a price effect, it is not an antitrust problem rests on a fundamental misunderstanding of antitrust law. It’s a misunderstanding that informs much of the criticism of the consumer welfare standard.

Bork brilliantly named it the consumer welfare standard, but it was never a consumer welfare standard. What the consumer welfare standard means in antitrust law is economic welfare. It means that antitrust law is about prohibiting conduct that impairs competition and thereby impairs economic welfare.

I think that’s a good standard and that we should not depart it. The attack on it—based on the idea that it’s all about price, and all about the short term—is nonsense.

Antitrust law is—and should be—concerned about anticompetitive conduct that increases or maintains market power, because it is market power that by definition means harm to the competitive process and that enables firms to take actions that are inconsistent with economic welfare. And we are concerned about free products, just as we are concerned about costly products, because, as Microsoft teaches, anticompetitive conduct aimed at free products can lead to an increase in market power.

John Roberti: I just want to underscore what Doug said about the consumer welfare standard. That is 100 percent right. If you are trying a monopolization case, the last thing you want to do is come in and say, “I want to blow up the standard. I want to do something entirely different.”

For the most part, what plaintiffs and what the government are really trying to do is to get back to the true meaning of the consumer welfare standard, which I think Doug articulated very well: it’s overall economic welfare; it’s not just short-term price effects and output effects.

Christopher Yoo: I agree with Bonny and John that the consumer welfare standard should be about economic welfare broadly conceived.

As Doug mentioned, there is a broader discussion that wants to move beyond economic criteria to take into account a broad range of nonecomonic factors.

I find it telling that many people who want to see more vigorous antitrust enforcement still support the consumer welfare standard and reject bringing in noneconomic considerations.What I find fascinating is that we can broaden antitrust enforcement within the economic paradigm by looking at more than just whether prices are too high. John, your example of the pharmacies is an excellent one. You also see in labor monopsony cases, in which employers use their market power to underpay labor. This creates economic inefficiency along the vertical chain of production even though it leads to lower end prices for consumers. I would say that even orthodox antitrust law is well positioned to find harms that cannot always be measured in terms of lower prices.

Antitrust law can look to other indicators. Consider, for example, the Third Circuit’s Uber case, which upheld the dismissal of taxi companies’ attempted monopolization claim. Rather than looking at prices, the court based its decision in part on whether the total number of vehicles offering rides went up or down.

So, the fact that taxi drivers found themselves squeezed was simply the result of a different business model that increased the level of competition and created net economic benefits that we can measure.

Ian Simmons: All right.

Christopher Yoo: A quick thought to go back to what you were saying, Ian, is that a lot of people seem to regard markets with zero prices as an unprecedented problem that antitrust does not know how to address.

My very first article was written about broadcast television, which, like much of the modern Internet was entirely an advertising-supported business. The fact that consumers paid zero prices did not stop enforcement officials from bringing antitrust cases based on monopsony power against advertisers and monopsony power against program suppliers. These cases show conventional antitrust techniques are well equipped to handle zero-price markets. We just need to recover the literature and precedents on these issues.

Ian Simmons: Fascinating. Of course, to the consumer turning on the television broadcast, it was free, at least in pre-­cable days, over-the-air.

Our panel is called “Litigating Best Practices for Trying a Section 2 Case,” so I want to move a little bit from the stratosphere. As the readership knows, there are few areas of antitrust law more conceptual than Sherman Act Section 2—that’s why I love it, it’s highly conceptual—and yet the concepts have to persuade someone wearing black robes or a jury of six or twelve.

I want to move to really a core issue, a vortex, in trying Sherman Act Section 2 cases, which is the issue of exclusionary conduct, a fascinating body of law, and a fascinating area to discuss.

But there are few areas of Sherman Act Section 2 law that I find more vexing. How do you distinguish lawful exclusion which results from competition on the merits from conduct that you are going to label “exclusionary?”

I want to start with Doug on that. What is exclusionary conduct and what is the guidance? How do I know where that line is drawn?

Douglas Melamed: I think everyone has a different way of putting it. Mine is an inference that I have drawn from what I see in the cases, the statute, the legislative history, and so forth. It’s this: all antitrust violations—and this is certainly true of Section 2—have at their core two elements:

The creation or increase of market power compared to the but-for world. That means that, in order to be exclusionary conduct, conduct has to do something to weaken the discipline of rivals. In an exclusionary conduct case, we are not talking about agreeing with the rivals; we are talking about, in effect, imposing on them circumstances that undermine their ability to be a discipline on the defendant and therefore enables the defendant to have more market power than it otherwise would have. That is the first element.

The second element is that the conduct must be anticompetitive, not just exclusionary. When Apple built the iPhone, it drove Motorola and Nokia out of the mobile phone business. That was exclusionary conduct, I suppose, but it certainly wasn’t anticompetitive conduct.

I don’t know what anticompetitive means, but I think I know what procompetitive means, or at least can infer that from what cases teach us and what economics teaches us. Procompetitive conduct is conduct that improves or is likely to improve product quality or reduces or is likely to reduce costs or above-cost prices. And by the way, the first two of those benefits could be by reason of innovation or something else, like investing more money in quality control at the plant. So, if you have conduct that excludes someone and doesn’t have the prospect of providing any of those three benefits, it is anticompetitive conduct.

Ian Simmons: So anticompetitive in your mind is what is left behind once you go through those three filters; is that a fair statement?

Douglas Melamed: Yes.

Ian Simmons: Let me ask if there are any comments on Doug’s definition of exclusionary from the panelists.

Christopher Yoo: I really like Doug’s proposal because it requires both an increase in market power and no prospect of improving quality, production, and cost. I think that is an extremely useful way of thinking about exclusionary conduct.

It reminds me that the late Clayton Christensen of the Harvard Business School pointed out that modern innovation is often business model innovation rather than a new invention or new scientific development.

What Doug’s definition underscores is that changes are often just a better way of doing business, and we are seeing that more and more in the tech platforms. I take Doug’s test to allow that if someone does an improvement in quality or cost—and I think the iPhone example is an excellent one—that is not going to be a sufficient claim even if it has the effect of weakening their rivals and even if it allows the innovating firm to charge extremely high margins and achieve an extremely strong market position. Any harm to rivals achieved by a revolutionary improvement in quality wouldn’t satisfy Doug’s test.

The concern I have about some of the cases, particularly the ones I see in Europe, is an inordinate focus on evidence of harm to rivals without undertaking the kind of inquiry that Doug is putting in.

Ian Simmons: But let me press on that a bit. Maybe Doug, Bonny, or John want to react to this. On the cost element, whose cost structure are we talking about? Are we living in a world with “winner take all” or are we competing for the field but we are not competing for a slice of the field, and the big firm has a lower cost structure and the new entrant has a higher cost structure, and the big firm does something vis-à-vis the lower new entrant firm with a higher cost structure, whose cost structure—I know the “equally efficient competitor” logic, but how does that map on to how we think about cost structure? Whose cost structure is relevant here? The new entrant by definition does not have the scale of the big one, and so if it is being predated, so to speak, in a way that forces it to exit, is that a problem?

Douglas Melamed: Let me take a stab. I think the one complication to what I said is that some kinds of conduct—and inventing the iPhone is probably this—hurt rivals only by shifting demand.

But other kinds of conduct can hurt rivals by raising the rivals’ costs. Suppose Apple in order to build the iPhone goes out and buys up a bunch of raw materials—not predatorily; it needs them to build a better product or to reduce its costs and thus it prices and uses all of the raw material—and in so doing it increases the price that its rivals face when they buy needed raw materials. Or suppose Apple enters into exclusive dealing arrangements, or something like that, that both provide those benefits and increase its rivals’ costs. And suppose further that the conduct in question can be shown to really be necessary to achieve the benefits I assumed.

Then you have the question: What do you do when you are not shifting demand but you are both increasing your rivals’ costs and creating a real benefit? What does the antitrust law do?

The courts tend to punt on this. Often courts say things like “balance” harms and benefits, but no one knows what that means. One way that courts have tried to resolve that question is by saying: “Well, if the conduct would not disadvantage someone equally efficient, we are not going to worry about it. So if you engage in some complicated pricing scheme or loyalty discount or whatever pricing strategy, we are not going to worry about that unless it would exclude an equally efficient rival.”

I understand why courts say that because it enables the economists to draw little graphs and come to easy answers, and that might be a good enough reason. But I am not sure that, as a theoretical matter, that is a very sound place to draw the line precisely because of the reason you suggested in your question, Ian. What if the little guy has really built a better product and with time could grow to be more efficient than the incumbent, but it is nipped in the bud before it has an opportunity to achieve that because it does not have enough scale to stay in business in the face of conduct that would exclude rivals that are less efficient than the defendant. I don’t think we should be indifferent to the plight of that little guy.

But that question really doesn’t change the basic framing of what we are thinking about here when we ask, “What is procompetitive conduct and what is anticompetitive conduct?”

Ian Simmons: Well said, Doug.

Christopher Yoo: What I find fascinating is that the possibility that a less efficient rival may provide competitive benefits even if it is less efficient. This is an underappreciated corollary to Oliver Williamson’s famous efficiency defense, in which he said that reductions in costs may create welfare benefits sufficient to offset any welfare losses created by the potential rise in price from the lessening of rivalry.

There is a limited amount of writing pointing out that the flip side must also be true, that is the welfare benefits from the additional rivalry more than offset the welfare losses resulting from the fact that the competitor may be less efficient. In this manner, an effects analysis would take the less-efficient rivals as they are while taking into account the net benefits of price competition and netting out the countervailing effects. If we are going to take seriously this notion of efficiency, it should work both ways. It can’t be a one-way ratchet.

And we also have to bear in mind that the whole literature on product differentiation tells us how smaller rivals could survive even when they face cost disadvantages by pursuing what I think of as the boutique solution, in which small providers who have lower volumes and worse cost structures can survive by selling a narrow range of goods tailored to the preferences of a small group of consumers, and then charge them more for giving them exactly what they want. This allows firms to tap into a source of welfare that is often underappreciated in the price/quantity space, which is the benefits of providing consumers with products that are a better fit with what they want.

Ian Simmons: Let me shift gears, and maybe I could start with Christopher on this one, and I want to keep us on target. Christopher, on this whole idea of exclusionary conduct we are seeing a debate play out in some of the various cases that are pending now—and we have seen it in cases that have been submitted, and courts come out different ways on this—involving the so-called “monopoly broth” theory. In other words, a plaintiff is alleging there are five pieces of conduct that the monopolist did that are exclusionary; and defendants like to say, “Antitrust is a tort and the plaintiff is not showing a causal flow from each individual act; it is aggregating them all, it is doing monopoly broth, and the plaintiff is being very imprecise on the causal flow from any subset of the five elements of conduct.” What’s your view on this monopoly broth debate?

Christopher Yoo: I think that the monopoly broth theory can be implemented in a manner consistent with the idea of an effects analysis where you look at the overall impact on the conduct. The two watch-outs are: (1) some conduct is per se legal; for example, innovating in your product and unilateral refusals to deal. If so, adding them into a broth should not add anything.

But what bothers me more is when the broth consists of conduct that is completely ambiguous, any case must be based on a coherent theory about how the combination of harms actually hurts competition. Otherwise, parties can hand wave at a lot of conduct that does not sound very good to a jury. We all know that business involves a lot of conduct that is not very attractive in the cold light of day, but is consistent with competition on the merits.

To avoid this type of guilt by association, plaintiffs should be required to put forward a coherent theory and evidence of how the different types of conduct combine to harm consumers and to propose remedies that address those problems if we are going to prevent the monopoly broth approach from just being an excuse for sweeping in a bunch of bad monopolization cases that couldn’t live up to their burden of proof.

Ian Simmons: That may be begging the question, bad monopolization cases, but let me bring in Bonny. Christopher mentioned a jury. I want to move a little bit now in our discussion of exclusionary conduct to where the rubber hits the road.

Bonny, talk to us about—and you can refer to the broth issue—how you attempt to develop your trial narrative on exclusionary conduct. You know Max Blecher famously said, “The whole point of being an advocate is to prejudice the trier of fact against your opponent.” He didn’t see anything unsavory about the idea of trying to prejudice a trier of fact against your opponent; that’s what advocates do.

Bonny, how do you think about using facts to prejudice the trier of fact against a firm allegedly engaged in exclusionary conduct? How do you go about telling the story? What role does intent play? What role does the broth play?

Bonny Sweeney: I’ll start with the so-called monopoly broth”, which is a subject of contention in some monopolization cases. The courts have different formulations, but one common element—and this has been mentioned—is that the courts, including the Supreme Court, recognize that you have to look at the market realities in which this allegedly anticompetitive conduct is taking place.

Sometimes that requires looking at different categories of conduct together. For example, if the monopolist has entered into a series of exclusive contracts, the finder-of-fact must look at the conduct as a whole to determine the extent of foreclosure. That’s an easy case. At the other extreme, if the plaintiff seeks to aggregate conduct that is subject to specific legal tests-like predatory pricing or refusals to deal, courts have said, “No, we can’t lump those kinds of conduct together and decide that this is as a whole anticompetitive if individually these acts would not be anticompetitive.”

In the middle are cases like the Third Circuit’s LePages decision, in which the court considered the anticompetitive effects of 3M’s bundled rebates and exclusive contracts together, and the Sixth Circuit’s decision in Conwood v. U.S. Tobacco, which upheld a plaintiff’s verdict based on a whole host of conduct, including exclusive agreements, destruction of the plaintiff’s point-of-sale advertising, and disparagement of the quality of its snuff.

It is a very fact-dependent inquiry because there are clearly certain kinds of conduct that in order to become anticompetitive interact with other kinds of conduct that render that conduct anticompetitive, so it would be incorrect in those cases not to look at the conduct as a whole.

In terms of what I look for as an advocate in trying or litigating an antitrust case, unfortunately, as we talked about, so much of this is very theoretical, it is very abstract, and it is very hard to make your case understandable and compelling. So how do you do that in a monopolization case?

Just like in any case, the role of the advocate, the litigant, especially on the plaintiff side, is to be a good storyteller and be able to make your case understandable. You need to fit it into a narrative arc. It helps make it more understandable and it makes it more interesting. If you are in front of a jury, this is particularly important.

Intent can play a role for sure. Of course, you don’t have to prove intent in an antitrust case except in an attempted monopolization case. However, the courts have recognized, and the Supreme Court has said, that intent often helps illuminate the facts; it helps you interpret the evidence and predict the consequences of the acts that you are asking the trier of fact to evaluate.

If you have evidence that shows bad intent and there is a way to get that into evidence, I think that is a very important strategy.

Showing harm is critical. In public enforcement cases, the government does not have to show harm to business or property, but if there is harm to consumers, if there is harm to competitors, that is easier to understand than the abstract harm to competition.

In addition, going back to the monopoly broth question, if you are going to have different categories of anticompetitive conduct—and I think Doug mentioned this—if you can show that you have a coherent theory as to how those acts fit together and how they harmed competitors, consumers, the competitive process, that is very critical.

Ian Simmons: And as Bonny well said, both on the intent point—it was Justice Brandeis in Chicago Board of Trade who said, “Knowledge of intent may help the finder of fact interpret fact and predict consequences;” and the D.C. Circuit in Microsoft 1994 famously said, “Intent may be probative as to effects.” Those points about intent always resonated with me, and the intent idea is something that a trier of fact could gravitate to because judgments are being made on whether to be prejudiced or not against the defendant.

On your point about theory, in a case that doesn’t get the publicity I think it deserves, the first case that the government brought against Microsoft in 1994, the per-­processor case, where Microsoft was alleged to engage in de facto exclusive dealing by requiring OEMs to pay a royalty to Microsoft whether or not each processor had Microsoft’s operating system loaded on it, the government characterized that as a tax: “Why would I load a non-Microsoft operating system if I have to pay Microsoft anyway?” To me that is a really pristine example of theory and narrative: “Why am I paying you if I’m not loading your product?” There was an inherently unjust theme going on there that I thought was effective.

John, let me ask you. You are representing a plaintiff in a monopolization case and you have to convince the finder of fact that the defendant’s actions are beyond the pale. What kind of themes are you going to emphasize? Do you want fact witnesses? Are you going to put all the burden on your experts? Talk to us about how you would go about prejudicing a trier of fact against a purported monopolist.

John Roberti: I would try to get the trier of fact to really see the truth, Ian. Look, the answer to your question is yes, each of the people you identified has a particular role. If you are representing a private plaintiff, or if you are representing the government even, if you do not have regular people who can tell a story about how they are being harmed, it is going to be a rather unconvincing story.

Likewise, if you don’t have villains from the other side who you can cross-examine and demonstrate that they are the villains, you are going to have a rather unconvincing story. If you have an expert who tells a story that is so complicated that it is not accessible to regular folks, you are not going to be convincing either.

The key thing to do is to make the story understandable. We have talked a lot about theoretical concepts that are critical to understand, but once you start telling your story you’ve got to speak in words that people are going to understand.

Ian Simmons: So making a story resonate. A story can’t resonate with the trier of fact unless it is understood.

Let me start with Doug on this one. We know how important experts are in antitrust cases—industry experts, economists. Doug, how important are they and how do you make these brilliant economists understood by a trier of fact and resonate with the trier of fact? Talk to us about how we use experts in antitrust and we don’t leave them in the stratosphere, we get them down to talk to mere mortals and resonate with those mortals.

Douglas Melamed: The first thing you do is you hire an economist who can make himself understood by people who aren’t economists. A courtroom is obviously not a workshop for cutting-edge economics. It’s a different enterprise.

I think Bonny and John are completely right. It’s the story. Both parties are trying to tell a story. I think that story revolves around the two issues I discussed earlier: harm to competitors or the creation of market power—which are two sides of the same coin—and was the conduct good or bad. And you want that story to be told by the best storyteller.

Experts have had maybe an oversized role in antitrust for lots of reasons. Experts are needed to explain things that are not self-evident from documents or percipient witnesses. By the way, experts are also sometimes very useful synthesizers of the story, and some have a gift for that.

Explaining things that are not self-evident is frequently going to be important in antitrust because antitrust cases often involve issues about abstractions—market definition, competition, even improving a product if it is not a tangible product with observable features, incremental costs, and so forth. Also, the legal rules, and if it’s a jury the jury instructions, are going to at least implicitly embody economic concepts. So you are probably going to need an economist.

You want someone who, as you say, can translate the economic insights and understanding into a language that is both rooted in the facts of the case and intelligible to people who are not experts. That’s just a forensic skill, I think, and presumably good lawyers are going to pick economists who are good at that, and hopefully they are also good economists and not charlatans.

Ian Simmons: Well said, Doug.

Christopher Yoo: Ian, before I went to law school I went to business school and then worked for Procter & Gamble, where I underwent sales training. The trainers repeatedly emphasized, “Stories sell. Don’t give me all this theory. What you really need is a story.” That’s what brings it together.

I think what John, Bonny, and Doug were all talking about is the power of stories because talking about numbers and abstractions is only going to get you so far. Every basic person who has been involved in the business of persuasion understands all too well the value of that motivating example that brings it all together.

Ian Simmons: Well said, Christopher. As with you, Doug, John, and Bonny, it’s not just stories, I assume, but it’s also teaching. It’s also an expert who is speaking to the trier of fact as if they were a student they are teaching.

Let me go to this and you can come back to the expert issue, the fact issue, the broth issue. So many of the cases we are seeing in the courtroom now relate to theories of foreclosure or doing something to a rival to hurt innovation. Doug and Christopher mentioned innovation very early on and I want to come back to it a little bit because I think it’s a good topic that implicates both the stratosphere concept but also how you are going to prejudice that trier of fact against your opponent—defendant vis-à-vis plaintiff, plaintiff vis-à-vis defendant.

What I’m getting at is this: We’re seeing all these high-tech cases. Well, if I’m a layperson I think: What’s a more dynamic industry than high tech, they’re constantly innovating; and this plaintiff is claiming that the dominant firm did something to a rival which hurt innovation; and because it hurt innovation, that’s bad conduct, it’s exclusionary, and somebody was injured as a result?

I want to start with the advocates on this; maybe we could start with John or Bonny, whoever wants to go first, and then we’ll go to Doug and Christopher. How do we make concrete and tangible to a trier of fact something as ephemeral as innovation—a better mousetrap would have been invented or proliferated faster? How do you make that tangible evidence in a court to prejudice a trier of fact when we are talking about the laboratory of the mind and a world that did not happen? Who wants to start, John or Bonny?

John Roberti: I’ll go first. The way you do it, Ian, is you make it simple and tangible, as you said. But, when talking about conceptual innovation, you’ve got to bring it back to the practical so the trier of fact understands how the fact that innovation didn’t happen is actually going to matter. The real challenge is in most cases a monopolist will play the innovation card, even in places where that innovation is really highly questionable. It’s a good card to play.

Ian Simmons: The monopolist, in other words, is saying, “I’m innovating so much because I hear the footsteps on the pavement. This person is coming to dislodge me, so I am going to keep innovating.”

John Roberti: Exactly right, Ian.

Ian Simmons: What’s your rejoinder to that, John? You do plaintiffs’ work.

John Roberti: And the answer to that is, “No, it isn’t.” It is often that claims of innovation are much less than meets the eye or the harm from the exclusion outpaces the innovation.

Ian Simmons: Bonny, would you like to speak to this, and then we’ll go to Doug and Christopher? I think it’s an important issue where so much comes together, theory and advocacy.

Bonny Sweeney: Yes. What John said was very well said. It has to be practical. We as antitrust lawyers, experts and professors talk a lot about innovation, and we assume that everyone understands what it is we are talking about. But, it absolutely has to be concrete and presented through witnesses who are compelling.

I wanted to go back to trials. One important statistic is that so few monopolization cases actually go to trial and result in a verdict or a decision by the court. I did a little digging, and since the Microsoft case, there have been approximately thirty monopolization cases tried to a verdict in federal court. That is not very many, so there is not a lot of data to work with in terms of figuring out what kinds of messages work for the jury or for the judge as trier of fact.

Ian Simmons: Interesting.

Doug and Christopher, you can take a pass if you’d like, but do you have any thoughts on how a plaintiff goes about making concrete theories of injury to innovation when the idea may be very ephemeral and yet you are in a court of law where tangible evidence has to be tendered?

Douglas Melamed: I really have nothing to add to what John and Bonny said about how you put on the show for the fact finder. But I do have one brief thought.

Take a pharmaceutical case where Company A excludes Company B. If you have a good story to tell, you might well want to say: “You know what happened when you weakened Company B and it had to shut down its research operation in Delaware? We had to stop our research on drug so-and-so. Do you know how many people have died a painful death?” You can tell that story. You can imagine that story motivating the fact-finder.

But the plaintiff does not have to prove innovation effects, or price increases or output restrictions, because they are not elements of the antitrust offense. The antitrust offense is creating market power. If you prove market power, you can presume an increase in price or a decrease in output because market power is by definition the ability profitably to cause that; if there is profit from doing it, you can presume the company is going to do it. Harm to innovation is a more complicated story. Evidence of the likelihood of any of those bad outcomes, or the absence of the likelihood of bad outcomes if the conduct under investigation has been going on for a long period of time, can shed light on the plausibility of the market power story. But it is not an element of the offense.

So my one caution would be—although I would defer to John and Bonny because of their expertise as trial lawyers—do not put a witness on to try to show innovation effects if you do not really have a good story to tell because you do not have to do that to win the case.

Christopher Yoo: I want to emphasize something that Doug said, that is really important: The story gives the framework, but you then have to establish the likelihood that something is going to happen through evidence. Being able to tell a story of how something could happen doesn’t prove it did happen or will happen. That is the interesting complication we always run across.

One way to show harm to innovation, is to offer a prediction of what benefits would have arisen if the firm had not taken the action that it did.

It also seems important to predict potential harms that might have arisen had the firm acted differently. We had mentioned earlier the debates about acquisitions of nascent competitors. This is something that to me is a classic problem where we need the filters to understand what the future is going to be.

My favorite example when I teach is that at the time Google acquired Android they had about ten employees and no revenue. Fans of blocking acquisitions of nascent competitors presume that we could have looked into our crystal balls and seen what Android was going to become. At the same time, it is equally plausible that the reason Android was so successful is its acquisition allowed Google to combine it with its other resources.

Moreover, when you look at nascent acquisitions from the standpoint of the startup, the target of the acquisition, they would usually say, “I have two exit strategies: Maybe we can do an IPO and make out really, really well; but, failing that, we would like to be acquired by one of the larger companies.”

We all know that in the last twenty-thirty years the IPO route has become much less. But even if they were both on the table, they could ask: “How does taking one of my exit options off the table enhance my ability to innovate?”

Ian Simmons: Interesting.

We have just about twenty minutes left. Let me shift gears slightly to a logistical question and start with Bonny and John on this.

You know there is this baggage associated with monopolization cases that they take forever to get ready for trial and they take forever in trial. United States v. IBM lasted from 1969 to 1982 and United States v. AT&T was 1974 to 1982. By the way, they were resolved on the same day. I have hanging in my office a facsimile of The New York Times’ front page with a picture of Assistant Attorney General William Baxter with the Chairman of AT&T. He dismissed without merit the IBM case, but he settled and broke up AT&T.

Why do these cases take so long, or do they have to? United States v. Microsoft was a seventy-six-day bench trial. I tried a case last March in April in the Southern District of New York, US Airways v. Sabre, which was the first jury trial in a two-sided market case under American Express, and each side had 36.5 hours to put on its case, and we won a plaintiff verdict in the first jury trial in a two-sided market case.

Where are we headed with the length of these cases? Are the agencies coming up with a way of making these things palatable or are they making this like Bleak House? Where do you see this going both in the public bar and the private bar on the plaintiffs’ side?

Bonny Sweeney: I can start. I think the direction is coming from the judiciary. Judges are not going to tolerate four-year trials anymore.

We see this all the time. You said you had thirty-six-and-a-half hours to put on your case. I think we are seeing that in virtually every complex federal trial, certainly the ones that I am familiar with. In the last couple of years, all of the antitrust trials that I have seen have been in the range of four-to-five weeks for Section 1 and Section 2 cases. So judges are making those decisions for us, and I think it is for the better.

Especially if you are in front of a jury, prolonging the trial is not going to make your case any better. A time limit forces the parties to be clearer and more concise in their presentation of evidence. I think it is a great improvement over the IBM and AT&T framework.

John Roberti: I couldn’t agree more. My experience is the same as yours. I had a case where a trial was set last year. The parties asked for forty hours each, and the judge said, “It’s twenty-eight hours each.” And guess what? We were ready to do it in twenty-eight hours each.

In the same trial, the parties came in with 1,000 exhibits. By the time they had talked to the judge for an hour, each side had reduced the number of exhibits down to a couple hundred. The judiciary is going to exercise more control to try to keep their dockets moving.

The feedback we hear from the judges who work with the Antitrust Section is that they love antitrust cases because typically, they are well-lawyered on both the plaintiff and defense side, they typically involve experienced good advocates, they are interesting, and often they are a nice show. But, they don’t love them to the exclusion of everything else they have going on. I think that is going to be the discipline that ultimately forces us to tell good stories.

Ian Simmons: The judiciary is forcing the parties, in other words, to remember Federal Rules of Civil Procedure 1, which is designed to secure the just, speedy, and inexpensive resolution of the litigation.

Before I move to our final topic today, I just wanted to note that on the colloquy we had on innovation and which is the winning side on prejudicing the trier of fact. I think it is interesting to recall the language in United States v. Microsoft where the D.C. Circuit said: Any kind of ambiguity on how the world would have played out but for the conduct that’s alleged to be exclusionary, that burden really rests on the defendant. It is an interesting passage.

Let me move to something that I have called before the elephant in the room. We are seeing this in many of these platform cases. We started off our very first line of conversation with: “What’s in the water? Why are we seeing so much monopolization litigations with many of them involving platforms?”

Is there an elephant in the room in these platform cases? Could it be said that the government is really challenging through these cases the rule in Trinko? John mentioned Trinko. That case said it is not illegal to be a monopolist and (absent an Aspen Highlands exception), a monopolist does not have a duty to deal with a rival or with anyone else; a monopolist can decide who it wants to deal with and under what terms.

But, it could be said—in fact, it is being said—that many of the cases challenging platform practices are really glorified challenges to Trinko because somebody is saying, “I don’t like the terms under which the platform is dealing with me or with somebody else.”

So is Trinko an elephant in the room in these cases? Are we going to see it kind of be a Grim Reaper for the prospects of the plaintiffs in these cases?

Doug, why don’t we start with you on this one.

Douglas Melamed: I think defendants are certainly going to argue something along the lines of: “I have a right not to deal with this guy, so if I dealt with him and self-preferenced myself”—to take some of the kinds of cases that are pending now—“that’s less harm than if I hadn’t dealt with him at all. So what’s the problem?”

I actually hope the government takes it on. If I were the government, bringing carefully constructed cases to try to narrow Trinko would be maybe my top priority.

We are all familiar with the old saw about hard cases make bad law. I think Trinko stands for the proposition that easy cases can make bad law. Trinko was an incredibly easy case. The issue in the case was whether the plaintiff could show that the defendant engaged in anticompetitive conduct by showing that it violated a non-antitrust rule, an FCC rule. The answer is obvious: “No, of course not. That is not an antitrust violation. You’ve got to show that the conduct is anticompetitive under the antitrust laws.”

The problem is that Justice Scalia went on and included in his opinion a lot of broad dicta that lower courts have treated like holdings of the case and have applied broadly to create a perceived broad safe harbor for all kinds of conduct that might by analogy or more directly be called a refusal to deal.

Extending Trinko to a self-preferencing case has a couple of problems. One is that it ignores a critical distinction: Trinko was about refusing to deal with someone who wanted to compete with the defendant in the defendant’s monopoly market; so there were all sorts of legitimate reasons why the defendant might say, “I don’t want him to be a free rider” and why the courts might be concerned about collaboration among competitors. In these self-preferencing cases, we are talking about someone in an adjacent market in which the self-preferencer usually has much less or often no market power.

Correctly read, I think Trinko does not preclude a refusal to deal-type claim if the plaintiff can both show an intelligible answer to the question “What are the terms of trade under which the defendant should have dealt with her?”, and prove some kind of profit sacrifice. Trinko made clear that it was not overruling Aspen Skiing.

Ian Simmons: Interesting.


Christopher Yoo: Ian, I think that a lot of people do think that Trinko is the elephant in the room, but to some extent I think that concern may be overstated.

If you look at the Cicilline Report issued by the House Subcommittee on Antitrust, it actually called for legislative abrogation of the Trinko decision. The authors of that report very clearly thought that Trinko is a big deal.

I am not a big fan of the argumentation of that report, which said: “Here’s a series of anecdotes that identify potential harms by four actors, from which we infer a problem with online platforms generally, from which we further infer the need to change the rules governing not only online platforms but every actor out there.” It is not a well-­constructed argument in terms of how it is built, but they clearly bought into the idea that one of the issues was Trinko.

Taking what Doug said, what is fascinating to me is that the people who think that Trinko is this huge obstacle are only reading half of the opinion. My point is that the first part of the opinion on substantive antitrust law says, “There is long tradition of a right to charge monopoly prices.” If that is all there was to it, the opinion should have just stopped there, period, and just said, “Here is the outcome.”

But, the opinion didn’t stop there. It actually went on to offer a nuanced analysis about institutional competence that is one of the hallmarks of the New Harvard School. Antitrust liability creates the potential for inconsistent remedies resulting from the fact that a state regulatory body was also imposing remedies in this space. The plaintiff asked for them to be revised, received some of those revisions but not all they wanted, and then they turned around and went to federal court to ask for antitrust relief on top of that.

Another way to interpret this is: (1) we only want one good adjudication, not multiple ones with the potential of judicial waste and the potential for inconsistent judgments, and we do not want people looking for that second bite of the apple running around; but (2) there is also an element of just understanding which is the actor better suited to oversee this type of behavior. Those considerations are not necessary if you take the very simplistic reading of Trinko.

So, I think that by looking much more holistically at the entire opinion you end up with a much more complicated analysis, which I think is influential in certain ways that we are talking about, but we have to take seriously the fact that the Court did include as a separate part of the analysis this question about the potential for a different kind of institutional actor providing relief for the defendant in addition to the Court’s recognition that investing in infrastructure represents a classic form of competition on the merits.

Ian Simmons: John or Bonny, any comments on Trinko?

John Roberti: I said early on that I thought Trinko was not quite the low point but the biggest blow that led to the low point in terms of the enforcement of Section 2.

I agree with you that, read properly, Trinko really is a pretty narrow decision. But, that narrow reading is not what has happened in the courts. The courts have taken the dicta and ran with it. They have created a bucket for cases involving the refusal to deal with a rival and have basically given immunity to these cases to a very, very large degree. There are still some exceptions; they talk about Aspen Skiing, for example; but courts view that as really, really limited.

In the bones of Trinko is a major hostility to Section 2. I don’t know if Trinko would be decided differently in today’s Supreme Court, but it is the law that we have.

It goes back to my point about why this interest in Section 2 cases. It is not necessarily that there are more chinks in the armor of Section 2 today as compared to ten or fifteen years ago. It is that the current enforcers are just willing to take chances and bring cases that are more difficult than perhaps prior enforcers were.

Trinko is absolutely the elephant in the room—not necessarily just in the platform cases, but in a whole swathe of other cases.

Ian Simmons: Bonny, please give us your thoughts.

Bonny Sweeney: Without speaking to government enforcement or any current cases, I agree with everything that Chrisopher said. Trinko does not say those things that advocates on the defense side say that it says.

That decision was rendered in a regulatory environment. The Telecommunications Act of 1996 was intended to deter and remedy anticompetitive harm. The Supreme Court recognized that regulatory framework and concluded that allowing the case to go forward would not significantly improve the competitive outcome.

So it is definitely overused and overread and, unfortunately, the dicta in the case is what stands out in the lower courts.

Ian Simmons: Well, panelists, it’s time for me to blow the final whistle. The only comment I would offer on Trinko is query whether we see the plaintiffs changing the subject, saying: “Trinko doesn’t apply because the defendant is engaged in restraints of trade vis-à-vis third parties, so input foreclosure or downstream foreclosure is at the heart of the matter. So it’s not so much that I want to deal with the platform; it’s that they are foreclosing things that I need downstream or that I need upstream.” So there’s that question.

Finally, one of the beauties of antitrust is that it is common law. Microsoft did not know it was violating antitrust laws until Judge Jackson told it it was. It is within the province of the agencies to build on the common law if they choose, or seek to have it evolve in one direction or another.

There’s so much we didn’t touch on—how to demonstrate a but-for world, examination techniques, and graphics—but we are at our time. We are just simply scratching the surface both of the concepts and how to have the rubber hit the road.

I want to thank today’s panelists—Bonny Sweeney, Doug Melamed, Christopher Yoo, and John Roberti—for their time and their thoughtful comments. I would also like to thank my colleagues Colleen Powers, Tyler Helms and Jack Derewicz for all their help leading to today.