Monopoly Power and Market Power in Antitrust Law

25 Pages Posted: 5 Jun 2008

See all articles by Thomas G. Krattenmaker

Thomas G. Krattenmaker

Wilson Sonsini Goodrich & Rosati

Robert H. Lande

University of Baltimore - School of Law

Steven C. Salop

Georgetown University Law Center

Abstract

This article seeks an answer to a question that should be well settled: for purposes of antitrust analysis, what is 'market power' and/or 'monopoly power'? The question should be well settled because antitrust law requires proof of actual or likely market power or monopoly power to establish most types of antitrust violations.

Examination of key antitrust law opinions, however, shows that courts define 'market power' and 'monopoly power' in ways that are both vague and inconsistent. We conclude that the present level of confusion is unnecessary and results from two different but related errors:

(1) the belief or suspicion that market power and monopoly power are two different concepts, when they are in fact, for antitrust purposes, qualitatively identical. We argue that attempting to distinguish between market power and monopoly power creates a false dichotomy; and

(2) the failure to recognize that anticompetitive economic power can manifest itself in two distinct ways, and these differences have significant legal and policy implications. The true distinction is between anticompetitive economic power that is exercised by restricting one's own output, and such power exercised by restricting the output of one's rivals. Identifying this fundamental distinction and discarding the false one can help to clarify a number of troublesome antitrust issues.

The body of this article describes these conclusions, and the bases for them, in some detail. The appendix presents a shorter, more technical description of the principal argument. Readers already familiar with the main body of antitrust law and conversant with antitrust economics may wish to begin by reading the appendix.

Keywords: antitrust,market power,monopoly power,competition law,

JEL Classification: K21

Suggested Citation

Krattenmaker, Thomas G. and Lande, Robert H. and Salop, Steven C., Monopoly Power and Market Power in Antitrust Law. Georgetown Law Journal, Vol. 76, No. p. 241, 1987. Available at SSRN: https://ssrn.com/abstract=1140761

Thomas G. Krattenmaker

Wilson Sonsini Goodrich & Rosati ( email )

650 Page Mill Rd
Palo Alto, CA 94304-1050
United States

Robert H. Lande (Contact Author)

University of Baltimore - School of Law ( email )

1420 N. Charles Street
Baltimore, MD 21218
United States

Steven C. Salop

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States
202-662-9095 (Phone)
202-662-9497 (Fax)

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