Table of Contents

Competition Law and Economics

Competition Law and Economics

Advances in Competition Policy Enforcement in the EU and North America

Edited by Abel M. Mateus and Teresa Moreira

Competition policy is at a crossroads on both sides of the Atlantic. In this insightful book, judges, enforcers and academics in law and economics look at the consensus built so far and clarify controversies surrounding the issue.

Chapter 15: The Current Debate About Section 2 of the Sherman Act: Judicial Certainty versus Rule of Reason

Barry E. Hawk

Subjects: economics and finance, competition policy, law and economics, law - academic, competition and antitrust law, law and economics

Extract

Barry E. Hawk1 Section 2 of the Sherman Act, which is a rough counterpart to Article 82, prohibits monopolization, attempt to monopolize and conspiracy to monopolize.2 Article 82 prohibits only abuses by existing dominant firms, and this chapter focuses on actual monopolization (as opposed to attempted monopolization or conspiracy to monopolize) under section 2. I. THE LEGAL CERTAINTY PROBLEM There has been considerable debate in the U.S. about the conduct element of section 2.3 This debate has included the question whether section 2 has generated too much legal uncertainty (that is, ex ante unpredictability) and, if so, how legal certainty can be increased. Two questions should be distinguished: first, how serious is the certainty problem; and second, what are the solutions? The first question is: how serious is the uncertainty? Certainly U.S. commentators and businesses have complained vociferously about the lack of predictable rules governing unlawful monopolization under section 2. For example, the Antitrust Modernization Commission in 2007 concluded that there is a need for greater clarity with respect to bundled discounts and unilateral refusals to deal.4 Uncertainty is compounded by the use of 1 I would like to thank my colleague Steven Hough for his research assistance, and Einer Elhauge and Gregory Werden for their comments. 2 Sherman Anti-Trust Act of 1890 § 2, 15 U.S.C. § 2 (2007). 3 Actual monopolization requires both monopoly power and ‘bad’ conduct. For references to the debate, see the articles cited in the References. 4 See Antitrust Modernization Commission, Report and Recommendations iii (April...

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