Resetting Section 2

8 Pages Posted: 21 Apr 2023 Last revised: 12 Mar 2024

See all articles by Herbert Hovenkamp

Herbert Hovenkamp

University of Pennsylvania Carey Law School; University of Pennsylvania - The Wharton School

Date Written: April 9, 2023

Abstract

This short essay considers the most productive ways that United States antitrust law could improve its treatment of unilateral conduct by dominant firms under Section 2 of the Sherman Act. First, much of the recent attention to digital firms is misdirected because it has not identified the monopoly problem correctly. The digital economy performs better than non-digital sectors, and too much of the popular attention has focused on large firms and network effects rather than true dominance. Second, U.S. antitrust law could benefit from a modified “abuse of dominance” standard somewhat like that imposed in the EU, but with some safeguards against overreaching. Third, the law of §2 of the Sherman Act should retain its focus on unilateral conduct that threatens reduced market output, increased prices, or restrained innovation. To be sure, the increasing use of §2 to pursue exclusive contracts and even mergers may be justified for addressing novel practices. In general, §2 of the Sherman Act has a stricter market power requirement than other antitrust statutes but is less categorical about specific elements of conduct. Using it to pursue practices such as mergers is hazardous, however, particular where market definitions are controversial. Finally, structural relief should not be pursued too promiscuously as a non-merger remedy.

Keywords: antitrust, monopoly,dominant firms, remedies, enforcement policy

Suggested Citation

Hovenkamp, Herbert, Resetting Section 2 (April 9, 2023). U of Penn, Inst for Law & Econ Research Paper No. 23-20, Available at SSRN: https://ssrn.com/abstract=4413747 or http://dx.doi.org/10.2139/ssrn.4413747

Herbert Hovenkamp (Contact Author)

University of Pennsylvania Carey Law School ( email )

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Philadelphia, PA 19104
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319-512-9579 (Phone)

University of Pennsylvania - The Wharton School ( email )

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Philadelphia, PA 19104-6365
United States

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