No-Fault Digital Platform Monopolization

61 Pages Posted: 22 Apr 2019 Last revised: 19 May 2019

See all articles by Marina Lao

Marina Lao

Seton Hall University School of Law

Date Written: March 7, 2019

Abstract

The power of today’s tech giants has prompted calls for changes in antitrust law and policy which, for decades, has been exceedingly permissive in merger enforcement and in constraining dominant firm conduct. Economically, the fear is that the largest digital platforms are so dominant and its data advantage so substantial that competition is foreclosed, resulting in long term harm to consumers and to the economy. But the concerns extend beyond economics. Critics also worry that the large platforms’ tremendous economic power poses risks of social and political harm and threatens our democracy. These concerns have prompted discussions of ways to reinvigorate Section 2 of the Sherman Act.

One of those suggestions is no-fault monopolization, a theory that dispenses with the conduct requirement of monopolization. Much of the appeal of no-fault monopolization, first considered in the late 1960s through the 1970s, is that it would sidestep the difficult “bad act” and “anticompetitive effects” requirements of Section 2, which are particularly difficult to prove in digital platform markets, for reasons that the Article addresses.

In this Article, I develop the reasons why no-fault monopolization would be inadvisable, though stronger Section 2 enforcement is long overdue. Rather than adopt an approach with uncertain results that might do more harm than good, I suggest more modest changes tailored to specific problems that could nevertheless reinvigorate Section 2. They include greater vigilance in identifying improper conduct, and seeking a steady widening of the scope of exclusionary conduct through bolder choice of cases, moving toward greater flexibility in the analysis of anticompetitive effects, and overcoming some of the skepticism surrounding the legitimacy and value of qualitative evidence, including intent evidence.

Keywords: antitrust, competition, digital platforms, monopolization, no fault monopolization, consumer welfare

JEL Classification: B20, D42, D43, D60, K21, L12, L13, L4, L40, L41, O30, O38, P10

Suggested Citation

Lao, Marina L., No-Fault Digital Platform Monopolization (March 7, 2019). William & Mary Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3368499

Marina L. Lao (Contact Author)

Seton Hall University School of Law ( email )

One Newark Center
Newark, NJ 07102-5210
United States

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