Editing United States antitrust law (section)

==Monopoly and power==
{{main|Monopoly|Market power}}
{{quote box|bgcolor=#c6dbf7|width=22em|salign=right|quote=Every person who shall [[monopolize]], or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a [[felony]], and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.|source= —[[Sherman Act 1890]] §2}}

The law's treatment of monopolies is potentially the strongest in the field of antitrust law. Judicial remedies can force large organizations to be broken up, subject them to [[positive obligation]]s, impose massive penalties, and/or sentence implicated employees to jail. Under Section 2 of the Sherman Act, every "person who shall monopolize, or attempt to monopolize ... any part of the trade or commerce among the several States" commits an offence.<ref>{{UnitedStatesCode|15|2}}.</ref> The courts have interpreted this to mean that monopoly is not unlawful ''per se'', but only if acquired through prohibited conduct.<ref>cf ''[[United States v. Aluminum Corp. of America]]'', 148 F.2d 416, 430 (1945) Learned Hand J, the "successful competitor, having been urged to compete, must not be turned on when he wins."</ref> Historically, where the ability of [[judicial remedies]] to combat [[market power]] have ended, the legislature of states or the Federal government have still intervened by taking [[public ownership]] of an enterprise, or subjecting the industry to sector specific regulation (frequently done, for example, in the cases [[Water law in the United States|water]], [[United States Department of Education|education]], [[Energy law|energy]] or [[health care]]). The law on [[public services]] and [[United States administrative law|administration]] goes significantly beyond the realm of antitrust law's treatment of monopolies. When enterprises are not under public ownership, and where regulation does not foreclose the application of antitrust law, two requirements must be shown for the offense of monopolization. First, the alleged monopolist must possess sufficient [[Market power|power]] in an accurately defined [[Market (economics)|market]] for its products or services. Second, the monopolist must have used its power in a prohibited way. The categories of prohibited conduct are not closed, and are contested in theory. Historically they have been held to include [[exclusive dealing]], [[price discrimination]], refusing to supply an [[essential facility]], [[product tying]] and [[predatory pricing]].

===Monopolization===
{{main|Monopolization|Abuse of a dominant position}}
*''[[Northern Securities Co. v. United States]]'', 193 U.S. 197 (1904) 5 to 4, a railway monopoly, formed through a merger of 3 corporations was ordered to be dissolved. The owner, [[James Jerome Hill]] was forced to manage his ownership stake in each independently.
*''[[Swift & Co. v. United States]]'', 196 U.S. 375 (1905) the antitrust laws entitled the federal government to regulate monopolies that had a direct impact on commerce
*''[[Standard Oil Co. of New Jersey v. United States]]'', 221 U.S. 1 (1911) Standard Oil was dismantled into geographical entities given its size, and that it was too much of a monopoly
*''[[United States v. American Tobacco Company]]'', 221 U.S. 106 (1911) found to have monopolized the trade.
*''[[United States v. Alcoa]]'', 148 F.2d 416 (2d Cir. 1945) a monopoly can be deemed to exist depending on the size of the market. It was generally irrelevant how the monopoly was achieved since the fact of being dominant on the market was negative for competition. (Criticised by Alan Greenspan.)
*''[[United States v. E. I. du Pont de Nemours & Co.]]'', 351 U.S. 377 (1956), illustrates the [[cellophane paradox]] of defining the relevant market. If a monopolist has set a price very high, there may now be many substitutable goods at similar prices, which could lead to a conclusion that the market share is small, and there is no monopoly. However, if a competitive price were charged, there would be a lower price, and so very few substitutes, whereupon the market share would be very high, and a monopoly established.
*''[[United States v. Syufy Enterprises]]'', 903 F.2d 659 (9th Cir. 1990) necessity of barriers to entry
*''[[Lorain Journal Co. v. United States]]'', 342 U.S. 143 (1951) attempted monopolization
*''[[United States v. American Airlines, Inc.]]'', 743 F.2d 1114 (1985)
*''[[Spectrum Sports, Inc. v. McQuillan]]'', 506 U.S. 447 (1993) in order for monopolies to be found to have acted unlawfully, action must have actually been taken. The threat of abusive behavior is insufficient.
*''[[Fraser v. Major League Soccer]]'', 284 F.3d 47 (1st Cir. 2002) there could be no unlawful monopolization of the soccer market by MLS where no market previously existed
*''[[United States v. Griffith]]'' 334 U.S. 100 (1948) four cinema corporations secured exclusive rights from distributors, foreclosing competitors. Specific intent to monopolize is not required, violating the Sherman Act §§1 and 2.
*''[[United Shoe Machinery Corp v. U.S.]]'', 347 U.S. 521 (1954) exclusionary behavior
*''[[United States v. Grinnell Corp.]]'', 384 U.S. 563 (1966) Grinnell made plumbing supplies and fire sprinklers, and with affiliates had 87% of the central station protective service market. From this predominant share there was no doubt of monopoly power.

===Exclusive dealing===

{{main|Exclusive dealing}}
*''[[Standard Oil Co. v. United States (Standard Stations)]]'', 337 U.S. 293 (1949): oil supply contracts affected a gross business of $58&nbsp;million, comprising 6.7% of the total in a seven-state area, in the context of many similar arrangements, held to be contrary to Clayton Act §3.
*''[[Tampa Electric Co. v. Nashville Coal Co.]]'', 365 U.S. 320 (1961): Tampa Electric Co contracted to buy coal for 20 years to provide power in Florida, and Nashville Coal Co later attempted to end the contract on the basis that it was an exclusive supply agreement contrary to the Clayton Act §&nbsp;3 or the Sherman Act §§&nbsp;1 or 2. Held, no violation because foreclosed share of market was insignificant this did not affect competition sufficiently.
*''[[US v. Delta Dental of Rhode Island]]'', 943 F. Supp. 172 (1996)

===Price discrimination===
{{main|Robinson–Patman Act|Price discrimination}}

*[[Robinson–Patman Act]]
*[[Clayton Act 1914]] §2 (15 USC §13)
*''[[FTC v. Morton Salt Co.]]''
*''[[Volvo Trucks North America, Inc. v. Reeder-Simco Gmc, Inc.]]''
*''[[J. Truett Payne Co. v. Chrysler Motors Corp.]]''
*''[[FTC v. Henry Broch & Co.]]''
*''[[FTC v. Borden Co.]]'', commodities of like grade and quality
*''[[United States v. Borden Co.]]'', the cost justification defense
*''[[United States v. United States Gypsum Co.]]'', meeting the competition defense
*''[[Falls City Industries v. Vanco Beverage, Inc.]]''
*''[[Great Atlantic & Pacific Tea Co. v. FTC]]''

===Essential facilities===
{{main|Essential facilities doctrine}}
*''[[Aspen Skiing Co. v. Aspen Highlands Skiing Corp.]]'', 472 U.S. 585 (1985) the refusal of supply access to ski slopes violated the Sherman Act section 2.
*''[[Eastman Kodak Company v. Image Technical Services, Inc.]]'', 504 U.S. 451 (1992) Kodak has refused to supply replacement parts to small businesses servicing Kodak equipment, which was alleged to violate the Sherman Act §§1 and 2. The Supreme Court held 6 to 3 that the small businesses were entitled to bring the case, and Kodak was not entitled to summary judgment.
*''[[Verizon Communications v. Law Offices of Curtis V. Trinko, LLP]]'', 540 U.S. 398 (2004) no extension of the essential facilities doctrine beyond that set in ''Aspen''
*''[[Otter Tail Power Co. v. United States]]'', 410 U.S. 366 (1973)
*''[[Berkey Photo, Inc v. Eastman Kodak Company]]'', 603 F.2d 263 (2d Cir. 1979)
*''[[United States v. AT&T (1982)|United States v. AT&T]]'' (1982) led to the [[breakup of AT&T]]

===Tying products===
{{Slist tying}}
{{main|Tying (commerce)}}
{{quote box|bgcolor=#c6dbf7|width=22em|salign=right|quote=It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or [[contract]] for [[sale of goods]], wares, merchandise, machinery, supplies, or other commodities, whether patented or unpatented, for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, [[Tying (commerce)|on the condition]], agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies, or other [[Commodity|commodities]] of a [[competitor]] or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen [[competition]] or tend to create a monopoly in any line of commerce.|source= —[[Clayton Act 1914]] §3}}

*[[Sherman Act 1890]] §1, covers making purchase of goods conditional on purchase of other goods, if there is sufficient market power
*''[[International Business Machines Corp. v. United States]]'', {{ussc|298|131|1936}} requiring a leased machine to be operated only with supplies from IBM was contrary to Clayton Act §3.
*''[[International Salt Co. v. United States]]'', {{ussc|332|392|1947}} it would be a ''per se'' infringement of the Sherman Act §2 for a seller, who has a legal monopoly through a patent, to tie buyers to purchase products over which the seller does not have a patent
*''[[United States v. Paramount Pictures, Inc.]]'', 334 US 131 (1948) Hollywood studios practice of requiring [[block booking]] was unlawful among other things
*''[[Times-Picayune Publishing Co. v. United States]]'', 345 U.S. 594 (1953) 5 to 4, where there was no market dominance in a product market, tying the sale of a morning and an evening newspaper together was not unlawful
*''[[United States v. Loew's Inc.]]'', 371 U.S. 38 (1962) product bundling and price discrimination. The existence of a tie was sufficient to create a presumption of market power.
*''[[Jefferson Parish Hospital District No. 2 v. Hyde]]'', {{ussc|466|2|1984}} reversing ''Loew's'', it was necessary to prove sufficient market power for a tying requirement to be anti-competitive
*''[[United States v. Microsoft Corporation]]'' [http://law.justia.com/cases/federal/appellate-courts/F3/253/34/576095/ 253 F.3d 34] (2001) and [https://www.justice.gov/atr/cases/f3800/msjudgex.htm District Court] (1999) Microsoft ordered to be split into two for its monopolistic practices, including tying, but then the ruling was reversed by the Court of Appeals.

===Predatory pricing===
{{main|Predatory pricing}}
In theory predatory pricing happens when large companies with huge cash reserves and large lines of [[credit (finance)|credit]] stifle competition by selling their products and services at a loss for a time, to force their smaller competitors out of business. With no competition, they are then free to consolidate control of the industry and charge whatever prices they wish. At this point, there is also little motivation for investing in further [[technology|technological]] research, since there are no competitors left to gain an advantage over. High [[barriers to entry]] such as large upfront investment, notably named [[sunk costs]], requirements in infrastructure and exclusive agreements with distributors, customers, and wholesalers ensure that it will be difficult for any new competitors to enter the market, and that if any do, the trust will have ample advance warning and time in which to either buy the competitor out, or engage in its own research and return to [[predatory pricing]] long enough to force the competitor out of business. Critics argue that the empirical evidence shows that "predatory pricing" does not work in practice and is better defeated by a truly [[free market]] than by antitrust laws (see [[Predatory pricing#Criticism|Criticism of the theory of predatory pricing]]).

*''[[Brooke Group Ltd. v. Brown & Williamson Tobacco Corp.]]'', 509 U.S. 209 (1993) to prove predatory pricing the plaintiff must show that changes in market conditions are adverse to its interests, and that (1) prices are below an appropriate measure of its rival's costs, and (2) the competitor had a reasonable prospect or a "dangerous probability" of recouping its investment in the alleged scheme.
*''[[Weyerhaeuser Company v. Ross-Simmons Hardwood Lumber Company]]'', 549 U.S. 312 (2007) a plaintiff must prove that, to make a claim of predatory buying, the alleged violator is likely to recoup the cost of the alleged predatory activity. This involved the saw mill market.
*''[[Barry Wright Corp. v. ITT Grinnell Corp.]]'' 724 F2d 227 (1983)
*''[[Spirit Airlines, Inc. v. Northwest Airlines, Inc.]]'', 431 F. 3d 917 (2005)
*''[[United States v. E. I. du Pont de Nemours & Co.]]'', 351 U.S. 377 (1956)

===Intellectual property===
{{main|US patent law|US copyright law}}
*''[[Continental Paper Bag Co. v. Eastern Paper Bag Co.]]'', 210 U.S. 405 (1908) 8 to 1, concerning a self opening paper bag, it was not an unlawful use of a monopoly position to refuse to license a patent's use to others, since the essence of a patent was the freedom not to do so.
*''[[United States v. Univis Lens Co.]]'', 316 U.S. 241 (1942) once a business sold its patented lenses, it was not allowed to lawfully control the use of the lens, by fixing a price for resale. This was the [[Exhaustion doctrine under U.S. law|exhaustion doctrine]].
*''[[International Salt Co. v. United States]]'', 332 U.S. 392 (1947) it would be a ''per se'' infringement of the Sherman Act §2 for a seller, who has a legal monopoly through a patent, to tie buyers to purchase products over which the seller does not have a patent
*''[[Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp.]]'', 382 U.S. 172 (1965) illegal monopolization through the maintenance and enforcement of a patent obtained via fraud on the Patent Office case, sometimes called "Walker Process fraud".
*''[[United States v. Glaxo Group Ltd.]]'', 410 U.S. 52 (1973) the government may challenge a patent where it is involved in a monopoly violation
*''[[Illinois Tool Works Inc. v. Independent Ink, Inc.]]'', 547 U.S. 28 (2006) there is no presumption of market power, in a case on an unlawful tying arrangement, from the mere fact that the defendant has a patented product
*[[Apple Inc. litigation]] and [[United States v. Apple (2012)|''United States v. Apple Inc.'']]