Document Type
Essay
Publication Title
New York University Journal of Law & Business
Publication Date
2024
Volume
20
First Page
333
Abstract
(Excerpt)
Recent monopolization cases against Google and Facebook brought by the Justice Department and the Federal Trade Commission signal that the United States is at the dawn of a new era of aggressive antitrust enforcement. If those cases are to be harbingers of an antitrust renaissance, then antitrust enforcers must confront and successfully overcome the Supreme Court’s 2004 decision in Trinko, which has cast a long shadow over antitrust enforcement efforts in monopolization cases. In breathtakingly broad and provocative language that is decidedly unsympathetic to enforcement of §2 of the Sherman Act, particularly in unilateral refusal to deal cases, and extends far beyond the facts of the case, Trinko has boldly re-written the antitrust narrative with respect to the monopolist and the offense of monopolization.
The once vilified monopolist has been re-cast as a key player in, and a necessary element of, the free market system, whose quest for short-term monopoly profits is what drives innovation and economic prosperity. Accordingly, the monopolist’s business decisions about firms with whom it will deal must be treated with deference by the courts, lest an ill-advised judicial intervention would thwart beneficially market behavior and possibly impair consumer welfare. The Court went on to disparage well-accepted antitrust doctrines, such as leveraging, which it had endorsed a decade earlier, and cast doubt on the continuing viability of the essential facilities doctrine. Finally, the Court fashioned a minimalist enforcement agenda for the lower courts, stressing that the risks of false positives, error costs, administrative costs associated with increased antitrust filings, the inherent limitation on the abilities generalist judges to distinguish procompetitive from anticompetitive behavior, and the limitation on judicial tribunals to control certain market behavior, militated against antitrust intervention by the Courts.
However, once you strip away the Trinko rhetoric and focus on what the Court actually did, as opposed to what it said, the opinion is quite narrow. The decision arose out of the unique set of factual circumstances in the technology-rich, ever-evolving telecommunications industry that is highly regulated and involves technologies and services that are not sold to the public. It was not a run-of-the-mill refusal to deal case and the court’s application of antitrust principles to the highly regulated telecommunications field tells us little about how antitrust should apply to less regulated areas of the economy, such as digital markets. In addition, although Trinko did denigrate certain well-established antitrust doctrines, for all of its bluster, the Court did not overrule any cases, did not specify any legal tests for refusal to deal cases, and, indeed, recognized that under certain circumstances, a monopolist’s refusal to deal with a rival can violate §2. Viewed in this light, Trinko, while still a formidable hurdle for plaintiffs in monopolization cases, is not insurmountable. In short, Trinko’ s bark is far worse than its bite, and its invocation by defendants in a motion to dismiss does not sound the death knell to a monopolization claim.
This essay seeks to: (1) trace briefly the evolution of monopolization law; (2) delineate the precise holding of Trinko, separating holding from dicta and uncovering both what the court said and did not say – about antitrust liability for single firm conduct; (3) demonstrate that Trinko is a marked departure from prior case law with sweeping pronouncements about §2 that go far beyond the facts of the case; (4) dispel the myth that Trinko strikes that death knell for monopolization claims; and (5) highlight post-Trinko case law that provides a potential path to victory for plaintiffs in monopolization cases.
Comments
Available at: https://www.nyujlb.org/copy-of-latest-issue-20-1