Of Trinko, Tea Leaves, and Intellectual Property

Abstract:     
In Verizon Communications v. Trinko, 540 U.S. 398 (2004), the Supreme Court held that a telephone company's refusal to share its network with rivals did not constitute monopolization. Although many aspects of the Court's holding are a defensible application or extension of existing case law, its language stretches far beyond the facts of the case to call into question the role of antitrust itself. The Court lauded the benefits of monopoly power; lamented antitrust's "considerable disadvantages," false positives, and negative investment effects; and bemoaned courts' supervision of decrees and "carte blanche" to force monopolists to "alter [their] way of doing business."

In this symposium article, I parse the Trinko opinion in close detail. In particular, I examine nine aspects of the opinion, which address (1) antitrust immunity, (2) monopoly power and incentives, (3) sharing, (4) refusals to deal, (5) essential facilities, (6) the existence of a regulatory regime, (7) antitrust's costs, (8) monopoly leveraging, and (9) the Court's conclusion. My analysis sheds light on the persuasiveness of the Court's reasoning and its likely application to future cases, especially refusals to license intellectual property.

Number of Pages in PDF File: 17

Keywords: Trinko, refusals to license, monopolization, intellectual property, telecommunications

JEL Classification: K11,K21,L12,L40,L41,L50,L96,O34

Accepted Paper Series