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Thomas O. Barnett Presentation

Slide 1

Section 2 of the Sherman Act


Thomas O. Barnett
Assistant Attorney General
Antitrust Division
U.S. Department of Justice

Antitrust Division and Federal Trade Commission
Hearings Regarding Section 2 of the Sherman Act

Washington, DC

June 20, 2006


Slide 2

Reasons for Sponsoring Hearings


  • Enhance Division Understanding of Unilateral Conduct
  • Advance the Development of the Law
    • Provide helpful guidance for courts
    • Provide helpful guidance for
    • businesses
    • Provide helpful guidance for
    • international community

Slide 3

Monopoly 96 Years Ago


  • Standard Oil and the 3 Evils of Monopoly
Standard Oil Image
  • Price Increases
  • Output Reductions
  • Quality Deterioration
Image of the Devel pointing at text

Slide 4

Product Development and Innovation


Image of Man sleeping in a cot

The Quiet Life:
Inhibiting Competitive Zeal

-- v. --

Gales of Creative Destruction:
Incentives to Innovate

Image of tornado

Slide 5

R.W. Grant, Tom Smith and
His Incredible Bread Machine


Picture of a man holding loaves of bread You're gouging on your prices if
You charge more than the rest.
But it's unfair competition
If you think you can charge less!
A second point that we would make
To help avoid confusion:
Don't try to charge the same amount!
That would be collusion.
You must compete--but not too much
For, if you do, you see
Then the market would be yours--
and that would be monopoly!

Slide 6

Monopoly Today


Judge Posner: Antitrust policy toward "unilateral abuses of market power" is "the biggest substantive issue facing antitrust." 72 U. Chi. L. Rev. 229, 229 (2005).


Slide 7

Monopoly Today


Professor Hovenkamp: "Notwithstanding a century of litigation, the scope and meaning of exclusionary conduct under the Sherman Act remain poorly defined." 72 U. Chi. L. Rev. 147, 147-48 (2005)


Slide 8

Brooke Group


  • Harm to a Competitor Does Not Demonstrate Harm to Competition Image of a harbor
  • The "Practical Ability of a Judicial Tribunal" to Regulate a Problem and Avoid "Chilling Legitimate Price Cutting"
  • The Importance of Safe Harbors

Slide 9

Trinko


  • Cost of False Positives
    • Underscores need for administrable rules
  • Remedy
    • Not all problems have antitrust solutions

Slide 10

Future Panels


  • Predatory Pricing and Predatory Buying
    • Appropriate cost measure
    • Relief
    • Weyerhaeuser
  • Refusals to Deal
    • When if ever should a firm be compelled to deal with a competitor?
    • Relief

Slide 11

Future Panels


  • Loyalty Discounts
    • Brief for the United States as Amicus Curiae in LePage's
    • Predatory pricing, exclusive dealing, or tying?
    • Safe harbors
  • Tying and Exclusive Dealing
    • Identifying and assessing efficiencies
    • Relief

Slide 12

Future Panels


  • General Principles
    • Is there an overarching standard for Section 2?
    • Proposed Tests
    • Different duties under different provisions of the antitrust laws?

Slide 13

Cartoon

[D]


Slide 14

Six Principles Informing
Section 2 Enforcement


  • Anticompetitive Exclusionary Conduct Should Be Prosecuted
  • Mere Size Does Not Demonstrate Competitive Harm
  • Injury to Competitors Does Not Demonstrate Competitive Harm
  • Need for Clear, Objective, and Administrable Rules
  • Avoid Chilling Procompetitive Conduct Remedy Must Promote Competition

Slide 15

Section 2 of the Sherman Act


Thomas O. Barnett
Assistant Attorney General
Antitrust Division
U.S. Department of Justice

Antitrust Division and Federal Trade Commission
Hearings Regarding Section 2 of the Sherman Act

Washington, DC

June 20, 2006

Updated December 29, 2023