How Do (and Should) Competition Authorities Treat a Dominant Firm's Deception?
55 Pages Posted: 27 Apr 2009 Last revised: 22 Feb 2012
Date Written: April 26, 2009
This Article discusses deception and its potential anticompetitive effects. Since deception lacks any redeeming ethical, moral, or economic justifications, and trust in the marketplace is paramount, multiple laws seek to deter and punish deception. Although the federal antitrust laws seek to deter acts of unfair competition, which historically included a competitor’s deception, some federal courts, recently have erected hurdles for antitrust plaintiffs injured by a monopolist’s deception. Such hurdles are contrary to the Sherman Act's legislative aim, the common law antecedents of the Sherman Act, and other congressional policies. Moreover, the courts’ legal standards for evaluating a monopolist’s deception involving advertising and product disparagement, vaporware, standard-setting organizations, and other deceptive conduct differ. This Article proposes a “quick-look” legal standard for evaluating a monopolist’s alleged deception. It addresses how the standard promotes several rule-of-law principles and responds to several concerns about using the antitrust laws to combat deception.
Keywords: Sherman Act, Antitrust, Competition Policy, Dominant Firm, Monopoly, Deception, Fraud, Section 2
JEL Classification: K21, L41, L12, K13
Suggested Citation: Suggested Citation