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Timothy Brennan, Jul 13, 2009
The handling of cases under the rubrics “monopolization,”single-firm conduct,” or “abuse of dominance” continues to be debated by the competition policy community. This debate, as evidenced by the Antitrust Division’s Sept. 2008 single-firm conduct report, followed by the FTC responses and its astonishing subsequent withdrawal (on which more below), is not restricted within the United States. The European Union has published Guidance Papers on standards for exclusionary conduct under Article 82, and the Canadian Competition Bureau recently issued draft guidelines for prosecuting conduct under the abuse of dominance provisions of Sec. 79 of its Competition Act.
Almost any significant antitrust case will engender controversy over the facts, e.g., damages resulting from cartel conduct or market definition for mergers. The controversy over single-firm conduct runs deeper. Much of this contention arises because the direct focus of the conduct, harm to rivals, is also the byproduct of vigorous competition. Despite everyone having learned to utter the mantra “protect competition, not competitors,” we find a line drawn between two sides. To caricature the bifurcation only slightly, one side (which I’ll call the skeptics) would set the burden of proof very high, with harms to competitors presumptively competitive. The other side (here called the activists) finds enforcement lax, is more willing to protect competition by protecting competitors.
I propose to resolve the controversy by positing that both sides are right—but within separate categories of monopolization cases.
The article is an adaption of a posting originally presented in a Section 2 Symposium on the blog site, Truth on the Market, available online at TruthOnTheMarket.
