Monopoly Power Following the DOJ’s Single-Firm Conduct Report


At Rouse Hendricks German May PC, Daniel Hodes specializes in complex civil litigation matters, with emphasis on high-dollar contract, tort, antitrust, and intellectual property matters. Mr. Hodes represents plaintiffs and defendants in federal and state courts in Missouri, Kansas, and throughout the country, as well as in arbitrations.

For at least the past 25 years, lawyers and commentators have argued that market power and monopoly power are “not distinct concepts, but qualitatively identical ones.”[1]  But as recently as the Eastman Kodak decision in 1992, the Supreme Court held that “[m]onopoly power under § 2 requires, of course, something greater than market power under § 1.”[2] This was followed by the DOJ’s 2008 analysis of single-firm conduct, which concluded that “[m]onopoly power entails both greater and more durable power over price than mere market power and serves as an important screen for section 2 cases.”[3]  As a result, it is critical for any party to a monopolization case to understand how courts and regulators have addressed these two concepts. 

In the first instance, the Supreme Court has defined “market power” in the Section 1 context as “the ability to raise prices above those that would be charged in a competitive market.”[4]  Possession of monopoly power – “something greater” – will only be found where a party has the “power to control prices or exclude competition.”[5]  In assessing these apparent differences, the DOJ Report identified two distinctions it would focus on for purposes of its assessment of “monopoly power.”  First, DOJ would look at market share, and then, “when warranted,” it would use “direct evidence of anticompetitive effects.”[6]

Market Share: The DOJ Report set the lower bound for “monopoly power” at 50%, and further concluded that a rebuttable presumption of monopoly power exists where “a firm has maintained a market share in excess of two-thirds for a significant period and the firm’s market share is unlikely to be eroded in the near future.”[7]  Accordingly, as in any discussion of market power, the definition of the relevant market becomes paramount. 

A market “must include all products reasonably interchangeable by consumers for the same purposes.”[8]  To facilitate this analysis, regulators use the SSNIP test, which defines the relevant market as that in which a hypothetical monopolist could enforce a “small but significant non-transitory increase in price” (generally defined as five percent).[9]

Thus, any attempt to prove (or defend against) an assertion of monopoly power will require market definition tailored to creating as narrow (or broad) as market as possible, usually through expert economic analysis.  As but one example, when the SSNIP test was used in Whole Foods, the FTC alleged a “premium, natural and organic supermarkets” market, while the defendants countered with “all supermarkets.”[10]  Given DOJ’s pronouncements on the importance of market share, definition of the relevant market may be the dispositive factor in many cases. 

Direct Evidence of Anticompetitive Effects:  That said, DOJ has left the door open for the market share presumption to be rebutted by consideration of the presence or absence of evidence of anticompetitive effects.  And while companies possessing below 50% of the market are almost per se insulated from monopolization cases, even 100% of a defined relevant market does not create monopoly power without some proof of the ability to control prices or exclude competition.  For example, the only bowling center in a particular geographic market prevailed at the Ninth Circuit due to a lack of proof of monopoly power, even assuming that it had 100% of the bowling center market in that area.[11]  Similarly, where an electric utility had total control of its transmission lines within a service area, a jury verdict was nevertheless affirmed where the jury credited evidence that wholesale competitors could build new lines and compete.[12] 

As a result, any successful proof of monopoly power should include not only the market share, but also the effects of that market share – whether via sustained supracompetitive pricing, or so-called monopoly leveraging (using a monopoly in one market to gain advantage in another market).


There has been a lengthy struggle in courts and by regulators to address the muddled distinction between market power and monopoly power in Section 2 cases.  The DOJ Report attempted to bring some clarity to those issues.  While the DOJ limited its focus to market share and anticompetitive effects, both factors remain fact-specific and dependent upon expert analysis of relevant market definition, pricing trends and activities in related markets and submarkets.  However, companies may remain confident that mere power over pricing does not create the “monopoly power” required to state a Section 2 claim.


[1] See, e.g., Krattenmaker, et al, “Monopoly Power and Market Power in Antitrust Law,” 76 Geo. L.J. 241 (1987).

[2] Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 481 (1992). 

[3] U.S. Dep’t of Justice, Competition and Monopoly: Single-Firm Conduct Under Section 2 of the Sherman Act (2008) (“DOJ Report”), at 30, available at .

[4] Nat'l Collegiate Athletic Ass'n v. Bd. of Regents of Univ. of Oklahoma, 468 U.S. 85, 104 S. Ct. 2948, 82 L. Ed. 2d 70 (1984)

[5] Eastman Kodak, 504 U.S. at 481. 

[6] DOJ Report, at 30.

[7] Id.

[8] F.T.C. v. Whole Foods Mkt., Inc., 548 F.3d 1028, 1037 (D.C. Cir. 2008), citing United States v. Microsoft, 253 F.3d 34, 52 (D.C. Cir. 2001). 

[9] Whole Foods, 548 F.3d at 1038. 

[10] Id. at 1028.

[11] Los Angeles Land Co. v. Brunswick Corp., 6 F.3d 1422, 1425-26 (9th Cir. 1993). 

[12] Borough of Lansdale v. Philadelphia Elec. Co., 692 F.2d 307, 313-14 (3d Cir. 1982).

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