The Dead Hand of Cellophane and the Federal Google and Facebook Antitrust Cases: Market Delineation Will Be Crucial

The Antitrust Bulletin, Forthcoming

30 Pages Posted: 6 Dec 2021

See all articles by Lawrence J. White

Lawrence J. White

Stern School of Business, New York University; New York University (NYU) - Leonard N. Stern School of Business, Department of Economics

Date Written: December 1, 2021

Abstract

The DOJ and FTC monopolization cases against Google and Facebook, respectively, represent the most important federal non-merger antitrust initiatives since (at least) the 1990s. As in any monopolization case, market delineation will be a central feature of both cases – as it was in the du Pont Cellophane case of 65 years ago. Without a delineated market, how can one determine whether a company has engaged in monopolization? Unfortunately, there is currently no accepted market delineation paradigm that can help the courts address this issue for monopolization cases. And this void generally cannot be filled by the market delineation paradigm that is embedded in the DOJ-FTC “Horizontal Merger Guidelines”: Although this paradigm has had almost 40 years of usage and is now well-established and -accepted for merger analysis, this paradigm generally has no applicability for market delineation in monopolization cases.
This article expands on this argument and shows the potential difficulties that are likely to arise in this area of market delineation and the consequent problems for both cases.
This article also points the way toward a paradigm that offers a sensible approach to dealing with these difficulties.

Keywords: Antitrust, monopolization, market delineation, Cellophane, U.S. Department of Justice, Federal Trade Commission, Google, Facebook

JEL Classification: K21, L4

Suggested Citation

White, Lawrence J. and White, Lawrence J., The Dead Hand of Cellophane and the Federal Google and Facebook Antitrust Cases: Market Delineation Will Be Crucial (December 1, 2021). The Antitrust Bulletin, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3975930

Lawrence J. White (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business, Department of Economics ( email )

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Stern School of Business, New York University ( email )

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United States
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