Title: The Uncertainty of Monopolistic Conduct: A Comparative Review of Three Jurisdictions
Abstract: INTRODUCTION The monopoly problem is central to antitrust. Theoretically, the adverse consequences of monopolization are well understood.(1) However, the development of appropriate laws to deal with the monopoly problem has proven to be troublesome. There is a continuing, and perhaps never-ending, search for an appropriate rule. There are two main limbs to the monopoly laws of most jurisdictions. The first is the identification of the presence of monopoly power. The second is the distinction between competitive and monopolistic conduct. These issues raise challenging questions. How should market power be measured, and what degree of power should attract the scrutiny of monopoly laws? How do we distinguish between conduct that is competitive and should therefore be encouraged, and conduct that is monopolistic and should therefore be prohibited? The problem is that often each type of conduct looks alike. Some cases will be easier to analyze than others. However, difficult cases will arise more often than not, and misdirection in the analysis of these questions will inevitably lead to outcomes that will be potentially detrimental to consumers.(2) This Article will address the second of the difficulties outlined above: the identification of unilateral monopolistic conduct.(3) The inquiry will focus upon the content of a general test for monopolistic conduct.(4) As times change, there have been divergent views on the content of a general rule. These views reflect differing values, beliefs, and new economic learning. Old theories, such as those about the problem of size, and the requirement that a monopoly must be passively received to escape the application of antitrust laws, have given way to an emerging awareness of the need not to hinder efficiency enhancing developments.(5) This Article will be presented in three parts. The first will survey the general tests for monopolistic conduct in the United States, the European Community, and Australasia.(6) The comparative review of these three jurisdictions reflects significant differences, and some occasional similarities. This is hardly surprising given the differences in the goals and the content of the legislation, as well as the prevailing attitudes and competitive environments in each of these jurisdictions.(7) Nonetheless, comparative study assists in the identification and analysis of questions that are central to a general theory of monopolistic conduct. These questions, which address the most basic of monopolization principles, will be examined in the second Part of this Article. This Part seeks to answer: (1) how can the test for monopolistic conduct be most appropriately characterized?; (2) must there be a causal connection between the market power and the monopolistic conduct?; (3) what, if any, attention should attach to the monopolist's intent?; and (4) should monopolistic conduct be capable of justification? This analysis provides the platform for concluding remarks that set out, to the extent possible, a suggested approach to the problem of monopolistic conduct. From these questions, a central argument emerges. The current uncertainty and complexity of various approaches to a general rule reflect the need for increased emphasis to be given to a monopolist's justification for its conduct. This trend is evolving, essentially based upon efficiency considerations. However, such a justification approach is problematic because economic efficiency is an intractable subject in the adjudication context. Nonetheless,justification analysis will potentially reduce the extent to which misdirection will occur. II. U.S. LAW A. Outline The U.S. antitrust laws governing monopolization date back to 1890, and thus provide an appropriate starting point for an analysis of antitrust law. Section 2 of the Sherman Act declares simply that monopolization is a crime.(8) In light of the lack of legislative guidance, it is perhaps not surprising that section 2 has had an uncertain and, at times, contradictory past. …
Publication Year: 2001
Publication Date: 2001-01-01
Language: en
Type: review
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Cited By Count: 2
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