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CHAPTER III
MONOPOLY POWER
Whereas Chapter II discussed the concept of monopoly power from
the standpoint of economics, Chapter III examines how courts have
defined and detected monopoly power. Chapter III begins with a
discussion of the related concepts of market power and monopoly power.
It then examines the approaches courts have established for identifying
the existence of monopoly power, focusing on relevant market definition
and related issues. Finally, Chapter III concludes with a discussion of
monopsony power.
A. Market Power and Monopoly Power
“Monopoly power” is an essential element in analyzing claims
brought under Section 2 of the Sherman Act.1Thecourtshavedefined
monopoly power as “the power to control prices or exclude
competition.”2This term is often equated with a high degree of market
power, as understood in economics.3
1. See Chapters IV and VI for a discussion of monopoly power as an
essential element of the § 2 offenses of monopolization and attempt to
monopolize, respectively.
2. United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 391
(1956); see also ABA SECTION OF ANTITRUST LAW,ANTITRUST LAW
DEVELOPMENTS 225-26 (6th ed. 2007) [hereinafter ALD6] (collecting
cases).
3. See Chapter II.A.2 for a discussion of the economic concept of monopoly
power; see also Bacchus Indus. v. Arvin Indus., 939 F.2d 887, 894 (10th
Cir. 1991) (“Monopoly power is also commonly thought of as substantial
market power.”); Reazin v. Blue Cross & Blue Shield of Kan., Inc., 899
F.2d 951, 967 (10th Cir. 1990) (“Market and monopoly power only differ
in degree-monopoly power is commonly thought of as ‘substantial’
market power.”); Deauville Corp. v. Federated Dep’t Stores, 756 F.2d
degree of market power”); U.S. Dep’t of Justice, Antitrust Division,
Competition and Monopoly: Single-Firm Conduct Under Section 2 of the
56 Monopolization and Dominance Handbook
1. The Element of Monopoly Power Under Section 2
Section 2 establishes liability for three types of antitrust violations:
monopolization, attempts to monopolize, and conspiracies or
combinations to monopolize.4The element of monopoly power in each
of these Section 2 offenses is discussed below.
a. Monopolization
To establish a monopolization claim, a plaintiff must show “the
possession of monopoly power in the relevant market . . . accompanied
by an element of anticompetitive conduct.”5In other words, a defendant
must possess monopoly power and must have acquired or maintained
that power through anticompetitive means.
b. Attempt to Monopolize
Monopoly power also plays a significant role in claims brought
under the attempted monopolization prong of Section 2. Attempted
monopolization requires a showing of three elements: “(1) that the
defendant has engaged in predatory or anticompetitive conduct with (2) a
Sherman Act 2 (Sept. 2008) [hereinafter Withdrawn Antitrust Division
Report] (“[M]onopoly power requires, at minimum, a substantial degree
of market power.”); ABA SECTION OF ANTITRUST LAW,MARKET POWER
HANDBOOK 5 (2005) [hereinafter MARKET POWER HANDBOOK](“[F]irms
with substantial amount of market power may be said to have monopoly
power....”);WilliamM.Landes&RichardA.Posner,Market Power in
Antitrust Cases,94H
ARV.L.REV. 937, 939 (1981) (noting that monopoly
power requires “a high degree of market power”).
4. 15 U.S.C. § 2 (“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,
orwithforeignnations,shallbedeemedguiltyofafelony....”).
5. Verizon Commc’ns v. Law Offices of Curtis V. Trinko, 540 U.S. 398,
407 (2004) (citing United States v. Grinnell Corp., 384 U.S. 563, 570-71
(1966)). Courts have also required some causal connection between the
alleged anticompetitive conduct and the antitrust injury. See, e.g., Austin
v. McNamara, 979 F.2d 728, 739 (9th Cir. 1992) (noting plaintiff must
prove “defendants’ (1) possession of monopoly power in a relevant
market; (2) willful acquisition or maintenance (‘use’) of that power; and
(3) causal antitrust injury.”) (internal quotations omitted).
