┌─────────────────────────────────────────────────────────────────────────┐
│                                                                         │
│                                                                         │
│                                                                         │
│           _  __             ____                           _            │
│          | |/ /___ _   _   / ___|___  _ __   ___ ___ _ __ | |_          │
│          | ' // _ \ | | | | |   / _ \| '_ \ / __/ _ \ '_ \| __|         │
│          | . \  __/ |_| | | |__| (_) | | | | (_|  __/ |_) | |_          │
│          |_|\_\___|\__, |  \____\___/|_| |_|\___\___| .__/ \__|         │
│                    |___/                            |_|                 │
│                                                                         │
│                                                                         │
│                                                                         │
│                                                                         │
└─────────────────────────────────────────────────────────────────────────┘

SILICON VALLEY ANTITRUST V.5
BOALT HALL SCHOOL OF LAW (2015)
Hanno Kaiser

UNILATERAL CONDUCT
- We want firms to act unilaterally, as a result: ROR (no per se rules)
- Monopoly is not illegal, monopolization is (big + bad)

§2: MONOPOLIZATION
                       ┌───────┐                                 
                       │  §2   │                                 
                       └───────┘                                 
                           │                                     
         ┌─────────────────┴──────────┬───────────────┐          
         │                    ┌───────┼───────────────┼───────┐  
         |                    │       |               |   ROR │  
   ┌───────────┐              │┌─────────────┐ ┌─────────────┐│  
   │ Monopoly  │              ││Exclusionary │ │ No business ││  
┌─>│   power   │<--Causation---+   conduct   │ │justification││  
│  └───────────┘              ││    P: AE    │ │    D: PE    ││  
│  ┌───────────┐              │└─────────────┘ └─────────────┘│  
│  │  Market   │              └───────────────────────────────┘  
├─>│definition │                Common categories                
│  └───────────┘                - Tying                          
│  ┌───────────┐                - Bundling/loyalty discounts     
│  │  Market   │                - Exclusive dealing              
├─>│   share   │                - Refusals to deal               
│  │  (>60%)   │                - Strategic incompatibility      
│  └───────────┘                - Predatory pricing              
│  ┌───────────┐                - Predatory overbidding          
│  │   Entry   │                                                 
└─>│ barriers  │                                                 
   └───────────┘                                                 


MARKET DEFINITION AND MARKET POWER
==================================
- Market definition is a critical element of a plaintiff's case and often the
  primary battleground in a monopolization suit
- STEP 1: PRODUCTS: Identify the "competing products"?
    - "Reasonable substitutes" from the buyer's point of view
    - What's reasonable? In an ideal world, determined by a hypothetical
      monopolist + SSNIP test. In the real world, often determined by:
      - Win/loss records
      - Industry partipants' views (strategic plans, marketing plans)
      - Customer views/actions
- STEP 2: COMPETITORS: Who supplies those products to the customers?
- STEP 3: MARKET POWER: How significant are the competitors? (= market power)
    - A market with 4 equally strong competitors is usually more competitive
      than one with 1 strong and 3 weak competitors.
    - The stronger the competitors, the more limited a company's market power
- STEP 4: ENTRY BARRIERS. Is entry into the market easy or are there barriers
  that protect the incumbents' market power?