Antitrust Divestiture in Network Industries

93 Pages Posted: 19 Apr 2001


The landmark Microsoft case raises challenging questions concerning antitrust remedies. In this Article, we propose a framework for assessing the costs and benefits of different remedies, particularly divestiture, in monopolization cases involving network industries. Our approach can assist a court or enforcement agency not only in analyzing the welfare effects of divestiture, but also in choosing more generally among alternative kinds of remedies. The framework would, for example, apply to a court's choice between damages and injunctive remedies or between behavioral injunctions and structural injunctions. After developing our framework, we apply it to the divestiture proposals made by the government and others in the Microsoft case. We argue that those proposals leave open important questions that must be answered before divestiture can be shown to be either the best remedial alternative or to create likely net gains in economic welfare.

JEL Classification: KO, L4, L5, D6, K21, K23, L9

Suggested Citation

Shelanski, Howard A. and Sidak, J. Gregory, Antitrust Divestiture in Network Industries. University of Chicago Law Review, Vol. 68, No. 1, pp. 1-99, Winter 2001, Available at SSRN:

Howard A. Shelanski

Georgetown University ( email )

Washington, DC 20057
United States

J. Gregory Sidak (Contact Author)

Criterion Economics, Inc. ( email )

1717 K Street, N.W.
Washington, DC 20006
United States
(202) 518-5121 (Phone)


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