Transcript Antitrust Treatment of Dominant Firms
Slide 1
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 2
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 3
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 4
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 5
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 6
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 7
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 8
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 9
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 2
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 3
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 4
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 5
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 6
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 7
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 8
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?
Slide 9
Antitrust Treatment of Dominant
Firms: Is the Atlantic Getting
Wider or Narrower?
Ken Glazer
ABA Antitrust Section
March 31, 2005
How Wide Is the Ocean?
In
the area of “vertical” monopolization . . .
The
ocean is as wide as ever if not wider.
Different Tones
E.U. approach
Dominant firm has “special responsibility not to allow
its conduct to impair genuine undistorted
competition.”
Emphasized in Michelin II and BA
U.S. approach
“The successful competitor, having been urged to
compete, must not be turned upon when he wins.”
(Learned Hand)
“Even an act of pure malice by one business
competitor against another does not, without more,
state a claim under federal antitrust laws.” (Brooke
Group)
Predatory Pricing
Brooke
Below-cost pricing
Plus plausible recoupment
American Airlines rejected attempt to broaden
test from AVC.
Tetra
Group (USSC)
Pak (ECJ)
Not necessary to prove that dominant firm
had realistic chance of recouping
“Consensual” Exclusive Dealing
E.U.
Presumptively illegal
E.g., Hoffman-La Roche; AKZO
U.S.
Rule of reason
Microsoft
Many upheld (e.g., CDC v. IDEX)
E.D. struck down recently in Geneva Pharmaceuticals
v. Barr Labs
“Coerced” Exclusive Dealing (aka
Refusal To Deal)
Strong
British Plasterboard
Weak
presumption of illegality in E.U.
presumption of illegality in U.S.
Lorain Journal
Dentsply
Greater willingness to examine alternatives
“Fidelity” or “Loyalty” Rebates
Virtually
In
per se illegal in E.U.
Reaffirmed by CFI in Michelin II
the U.S.
At worst, rule of reason governs
At best it is per se lawful (Concord Boat)
Canada Pipe followed rule of reason
approach.
Volume Rebates of Various Kinds
Illegal
in E.U. if they have “loyaltyinducing” (Michelin II) or “fidelity-building”
(British Airways) effect.
Award for increasing purchases over some
previous time period (British Airways)
Award for purchasing higher amount on a
scale applicable to all customers (Michelin II)
Lawful
in the U.S. unless predatory under
Brooke Group
Concluding Thoughts
E.U.
test: fidelity-inducing or loyaltyenhancing
Very different from U.S. test
But European Comm’n is currently
rethinking its approach to dominance.
Will that include proof of dominance?