Washington College of Law
American University
Adjunct Professor: Richard Mosier, Esq.
FALL 2015
Antitrust Law (Law-692)
6:00 pm – 7:20 pm MW
Updated Syllabus (August 30, 2015)
Course Description
This course examines Antitrust Law – the law that protects economic
freedom and opportunity by promoting free and fair competition in the
marketplace. We will focus on the current legal standards – including influential
lower court decisions – and government enforcement guidelines, and how those
standards and guidelines are used by practitioners and federal enforcers. We will
review historic case law to see how the standards have evolved. Topics will
include price-fixing, group boycotts, tying arrangements, exclusive dealing,
monopolization, and mergers.
Casebook
Page references below are to Andrew I. Gavil, William E. Kovacic &
Jonathan B. Baker, Antitrust Law in Perspective: Cases, Concepts and Problems in
Competition Policy (2d ed. 2008). Assigned readings from materials other than the
casebook will be posted.
Evaluation, Class Participation, and Problems
Course grading will be based primarily on a final examination, although
class participation will also be considered. Casebook problems that are assigned
in the syllabus will be discussed in class.
First Assignment
Please come to the first class prepared to discuss the assignment for the
first class.
1
Assignments by Class Session (Principal Cases Indicated for Reference Only)
Class 1: August 24
Introduction to Antitrust Law
Chapter 1: 2-17, 40-53 (Andreas (2000), Brunswick (1977), JTC Petroleum (1999))
Appendix A: 1251 (Sherman Act §1 and §2)
Background Reading (over the course when convenient): Chapter 1: 56-80
Preparation Questions
1. Who benefitted and who was harmed by the agreement condemned in
Andreas?
2. What types of agreements among rivals should be permitted and what
types should be prohibited?
3. Why did the Brunswick plaintiff challenge the merger at issue in that case?
4. Why did the Supreme Court in Brunswick decline to allow the plaintiff to
pursue its complaint?
5. Who benefitted and who was harmed by the agreement alleged in JTC
Petroleum?
6. Why did the appellate panel in JTC Petroleum permit the plaintiff to
pursue its complaint?
7. Should antitrust law be concerned equally with collusive and exclusionary
anticompetitive effects?
8. What counts as “harm to competition” in antitrust analysis?
9. Are the courts as institutions well-suited for identifying harmful business
practices?
Class 2: August 26
Agreements Among Rivals: Per Se Rule vs. The Rule of Reason
Handout on the Per Se Rule and the Rule of Reason
Chapter 2: 88-106, 154-65 (Trans-Missouri Freight (1897), CBOT (1918), Trenton
Potteries (1927), Socony (1940), NSPE (1978))
Preparation Questions
1. Did the conduct reviewed in Chicago Board of Trade harm competition?
2. What factors did the Court consider in evaluating the conduct in CBOT?
3. What factors did the Court consider in evaluating the conduct in Trenton
Potteries?
4. Did the conduct reviewed in Socony harm competition?
2
5. According to Socony’s footnote 59, what types of evidence can be offered
in defense by firms accused of fixing prices?
6. Did the conduct reviewed in NSPE harm competition?
7. What legal rule did the court apply in NSPE?
Class 3: August 31
Agreements Among Rivals: Traditional Per Se Categories (Price-fixing, market
allocation, and group boycotts)
Chapter 2: 107-122, 128-129, 135-153 (BMI (1979), Maricopa (1982), BRG (1990),
SCTLA (1990))
Preparation Questions
1. Did the conduct reviewed in BMI harm competition?
2. Was the conduct reviewed in BMI prohibited by the terms of the Socony
footnote?
3. Did the Court in BMI evaluate the legality of the conduct by applying the
legal rule set forth in NSPE?
4. How did the Court balance concerns about providing guidance to firms
and courts, minimizing administrative costs, and minimizing errors?
5. How do the potential harms and benefits of the conduct reviewed in BRG
and SCTLA, respectively, compare with price-fixing?
6. How do the legal rules that govern the conduct reviewed in BRG and
SCTLA, respectively, compare with the rule applied in BMI?
Class 4: September 2
Agreements Among Rivals: Structured Rule of Reason and the Ancillary
Restraints Doctrine
Chapter 2: 165-171, 175-187, 193 (middle paragraph), 198-211, 213-223 (Addyston
Pipe (1899), NCAA (1984), IFD (1986), California Dental (1999), Polygram (2005))
Antitrust Guidelines for Collaborations Among Competitors (2000) pp. 30 & 3234 (Ex. 4 & 8), available at http://www.ftc.gov/os/2000/04/ftcdojguidelines.pdf
Preparation Questions
1. Did the conduct reviewed in NCAA harm competition?
2. What legal rule did the Court employ in NCAA to evaluate the legality of
the conduct?
3
3. After NCAA, how are agreements among rivals tested, and when is the
rule of reason analysis truncated or structured, or a “quick look” rule
applied?
4. Did the conduct reviewed in Polygram harm competition?
5. What approach did the court employ in Polygram to evaluate the legality
of the conduct?
6. Was the rule of reason analysis truncated for the same reason in NCAA,
Polygram, and the examples in the Competitor Collaboration Guidelines?
7. Are truncated analyses under Sherman §1 better thought of as substantive
legal rules (about what facts must be demonstrated as a predicate to
liability) or burden shifting rules?
No Class: September 7 (Labor Day)
Class 5: September 9
Economics and Antitrust
Special Guest: Helen Knudsen, Ph.D., Economic Analysis Group, U.S.
Department of Justice, Antitrust Division
Chapter 1: 17-32
Class 6: September 14
Tacit Collusion: Solving Cartel Problems
Chapter 3: 227-36, 251-70 (Copperweld (1984), Interstate Circuit (1939), American
Tobacco (1946))
Handout on Twombly (2007) and Apple (2015)
[Review: Chapter 1: 4-14 (Andreas (2000)]
Preparation Questions
1. What economic problems must firms solve to act collectively like a
monopolist?
2. What practices help the firms solve those problems, and thus coordinate
more effectively?
3. How did the lysine conspirators solve their “cartel problems”?
4. Are the Supreme Court’s information sharing decisions consistent with
the modern economic understanding of factors that facilitate or frustrate
coordination?
5. Did the conduct of the firms in Interstate Circuit, American Tobacco,
Twombly, and Apple likely harm competition?
4
6. When should courts deem parallel conduct among oligopolists an
“agreement” and thus subject the firms potentially to liability under
Sherman Act §1?
7. If firms that recognize their interdependence can plausibly solve their
cartel problems without communication, and raise prices above
competitive levels, should a court infer an agreement among them to fix
prices?
Class 7: September 16
Tacit Collusion: Inferring Agreement
Chapter 3: 283-88, 297-301 304-11, 335-37 (Foley (1979))
Handout on Blomkest (2000)
Handout on In re Text Messaging (2010)
Preparation Questions
1. Based on the facts set forth in Foley, did the realtors solve their “cartel
problems,” permitting them to charge commission rates above the
competitive level?
2. Why did the Fourth Circuit conclude in Foley that a jury could have found
an agreement among the firms to fix prices?
3. What “plus factors” (beyond parallelism) do courts evaluate in
determining whether to infer an agreement among rivals from
circumstantial evidence?
Class 8: September 21
Presentation on the Antitrust Division – Civil and Criminal Enforcement
Special Guest: Kristina Srica, Special Assistant to the Directors of Civil and
Criminal Enforcement, U.S. Department of Justice, Antitrust Division
No Class: September 23 (Yom Kippur)
Class 9: September 28
Agreements between Firms and their Suppliers or Customers
Chapter 4: 352-70, 411 (bottom)-419 (top) (GTE Sylvania (1977), E&L Consulting
(2006))
5
Preparation Questions
1. Did the agreement challenged in GTE Sylvania harm either intrabrand
competition or interbrand competition?
2. What kind of facts would tend to show that absent an agreement between
manufacturer and dealer to restrict intrabrand competition, dealer free
riding would undermine interbrand competition?
3. What legal rule did the Supreme Court apply to decide GTE Sylvania, and
how (and why) did that rule vary from the rule previously applied in
Schwinn?
4. If the upstream firm is a monopolist, as in E&L Consulting, are (vertical)
agreements between that firm and a distributor restricting intrabrand
competition always harmful (do they benefit interbrand competition?),
always beneficial (is there only a single monopoly profit?), or sometimes
harmful?
Class 10: September 30
Agreements Between Firms and Their Suppliers or Customers
Chapter 4: 370-406 (Leegin (2007))
Preparation Questions
1. How could agreements between a manufacturer and dealer specifying the
resale price harm competition? How could they benefit competition?
2. Why did the Leegin majority decline to apply the longstanding rule set
forth in Dr. Miles? Why did the dissenters disagree?
3. The Leegin majority observes that in the wake of its decision, courts can
devise rules over time for offering proof, or presumptions, to make the
rule of reason work effectively. What rules or presumptions would you
propose that courts adopt?
4. Suppose a discounting dealer terminated by the manufacturer alleges that
its termination was pursuant to a resale price maintenance agreement
between the manufacturer and its dealers, and the manufacturer claims
that there is no vertical agreement and it is simply adhering to a unilateral
policy of not dealing with discounters. What effect could Leegin have on
the interpretation of Colgate in such a setting?
Class 11: October 5
Mergers Between Rivals: Structural Presumption and Market Concentration
Chapter 5: 431-468, (but skip section II, pp. 458-60), 499-507 (Brown Shoe (1962),
6
Philadelphia Nat’l Bank (1963), General Dynamics (1974), Baker Hughes (1990), Heinz
(2001))
Appendix A: 1256 (Clayton Act §7)
U.S. Dept. of Justice & FTC, Horizontal Merger Guidelines (2010), available at
http://www.justice.gov/atr/public/guidelines/hmg-2010.pdf
(read sections corresponding to readings as appropriate for classes 11 to 16 and
entire document by class 18)
Preparation Questions
1. What legal rule did the Supreme Court establish and apply in Phila. Nat’l
Bank?
2. Was the decision in General Dynamics consistent with Philadelphia Nat’l
Bank?
3. Was the decision in Baker Hughes consistent with General Dynamics and
Philadelphia Nat’ Bank?
4. Was the decision in Heinz consistent with Baker Hughes?
5. What is the significance in market concentration in reviewing a horizontal
merger under Clayton Act §7 today?
6. How is the Herfindahl-Hirschman Index (HHI) and the “delta” (change)
in the HHI arising from a horizontal merger calculated from market
shares, and what is the significance of those figures in the 2010 Horizontal
Merger Guidelines?
7. How strongly should courts presume harm to competition from a
horizontal merger generating high and increasing market concentration?
Class 12: October 7
Mergers Between Rivals: Market Definition and Market Concentration
Chapter 5: 474-81, 491-99
Handout on H&R Block (2011)
Chapter 7: 875-78
Preparation Questions
1. How did product market definition matter to the outcome of H&R Block?
2. Suppose a court was evaluating the merger of two Washington area firms
producing bricks for residential consumption. What evidence, if available,
would be relevant to determining whether the relevant product market is
bricks (rather than all building materials) and whether the relevant
geographic market is Washington, D.C. (rather than a broader midAtlantic region)?
7
3. Why did the court in H&R Block define digital do-it-yourself tax
preparation as a product market, excluding assisted tax preparation or
pen-and-paper?
4. When, if ever, should markets be defined with reference to targeted
buyers (as well as a product and region)?
Class 13: October 12
Mergers Between Rivals: Unilateral Competitive Effects
Chapter 5: 535-54 (Staples (1997))
Preparation Questions
1. How does market definition matter to the economic analysis of the
hypothetical Crunchies-Fruities merger?
2. What did the pricing evidence proffered by the FTC in Staples show about
the way that prices varied with the number of office superstore chains in a
metropolitan area, both across cites at a given time and over time within a
city?
3. Assuming prices are higher in cities served by fewer office superstore
chains, would the better explanation be that the firms are exercising
market power in such locations or that costs are higher in those cities?
4. In Staples, the FTC alleged a narrow product market defined as
consumable office supplies sold through superstores, while the merging
firms argued that the transaction should be analyzed within a broader all
office supplies product market. What difference did that choice make to
the evidence that the FTC proffered or to the FTC’s prospects for litigation
success?
Class 14: October 14
Mergers Between Rivals: Coordinated Competitive Effects; Efficiencies
Chapter 5: 517–35, 548-50 (review), 568-73 (HCA (1986), Staples (1997))
Handout on H&R Block (2011)
Preparation Questions
1. How did the factors facilitating or frustrating coordination that we
discussed in class 7 influence the analysis in HCA and H&R Block?
2. Why did the merger in each case make a difference to the likelihood or
effectiveness of coordination?
3. Did the district court in Staples sufficiently credit the efficiencies claimed
by the merging firms?
8
4. Did the district court in Staples analyze efficiencies as part of the
evaluation of competitive effects, or as a defense to an otherwise
anticompetitive merger? Which approach do the Horizontal Merger
Guidelines suggest?
5. Should efficiencies count only in cases in which the presumption of
anticompetitive effect based on market concentration barely kicks in, or
also operate to rebut the structural presumption when concentration is
very high?
Class 15: October 19
Mergers Between Rivals: Entry; Powerful Buyers
Chapter 5: 458-60 (review), 462-63 (review), 559-64, (Waste Management (1984),
Baker Hughes (1990))
Preparation Questions
1. Based on the facts set forth in Waste Management, would entry be expected
to counteract or deter any competitive problem from that merger?
2. Based on the facts set forth in Baker Hughes, would entry be expected to
counteract or deter any competitive problem from that merger?
3. How does the possibility of entry factor into the legal framework for
horizontal merger review set forth in Philadelphia National Bank, once the
government has demonstrated that the structural presumption should
apply? Does it count only in cases in which the presumption of
anticompetitive effect barely kicks in? Does it also count when market
concentration is very high?
4. Is the approach of the Horizontal Merger Guidelines to entry analysis
consistent with what the courts require?
5. Did the court in Baker Hughes adequately analyze the possibility that the
presence of powerful buyers would counteract any harm to competition
from merger?
Classes 16, 17, and 18: October 21, 26, and 28
Merger Hypothetical
Special Guests: Jesús Alvarado-Rivera and Bindi Bhagat, Trial Attorneys, U.S.
Department of Justice, Antitrust Division
Handout: The Soy Milk Hypothetical
Class 19: November 2
Single Firm Exclusionary Conduct: Monopolization and Attempt to
Monopolize
9
Chapter 5: 490-91
Chapter 6: 582-620 (Lorain Journal (1951), Alcoa (1945))
Appendix A: 1251 (Sherman Act §2)
Preparation Questions
1. Did the Lorain Journal’s conduct harm competition? If so, in what market?
2. What market did Alcoa monopolize? Was that market properly defined?
3. Did Alcoa charge a price in excess of the competitive level? Or otherwise
exercise market power?
4. Did Alcoa do anything that harmed competition? If so, did it obtain or
maintain market power?
5. Should antitrust law insist on proof of anticompetitive conduct beyond
mere monopoly pricing before finding monopolization?
6. What, if anything, about market definition would differ if the alleged
harm is retrospective (as in Alcoa) rather than prospective (as in H&R
Block)?
Class 20: November 4
Monopolization: Non-Price Exclusionary Conduct
Chapter 6: 620-40, 710 (last three full paragraphs on this page only) (Aspen Skiing
(1985))
Preparation Questions
1. What market did Ski Co. monopolize? Was that market properly defined?
2. Did Ski Co. charge a price in excess of the competitive level? Or otherwise
exercise market power?
3. Did Ski Co. do anything that harmed competition? If so, did it obtain or
maintain market power?
4. On what basis does the court in Alcoa and Aspen distinguish
“exclusionary” or “predatory” (non-price) conduct undertaken by a
monopolist from conduct that does not constitute a “bad act” sufficient to
support a finding of monopolization?
Class 21: November 9
Monopolization: Non-Price Exclusionary Conduct
Chapter 3: 347-49
Chapter 6: 640-57 (Microsoft (2001))
Chapter 8: 907-15 (Re/Max (1999))
Handout on Blue Cross Blue Shield of Michigan (2010) and Amex (2015)
10
Preparation Questions
1. How were monopoly power and anticompetitive effects demonstrated in
Re/Max and Microsoft?
2. On what basis does the D.C. Circuit in Microsoft distinguish
“exclusionary” or “predatory” (non-price) conduct undertaken by a
monopolist from conduct that does not constitute a “bad act” sufficient to
support a finding of monopolization?
3. Should the Justice Department investigate the use of “most favored
customer” provisions by dominant health insurers contracting with
physician groups or hospitals?
Class 22: November 11
Monopolization: Predatory Pricing
Chapter 1: 81-86
Chapter 6: 659-73, 675-80 (top), 763-64 (Brooke Group (1993))
Preparation Questions
1. What was Liggett’s theory about how Brown & Williamson’s conduct
harmed competition?
2. Based on the facts recounted in Brooke Group, was Liggett’s theory
plausible?
3. Does the Court reject Liggett’s recoupment theory on the facts or the law?
Taking the facts in a light most favorable to Liggett, was it correct to do
so?
4. Treating Brooke Group as though it were an attempted monopolization
case, how does the legal rule for proving attempted monopolization
through predatory pricing differ from the legal rule that would be applied
if the alleged exclusionary conduct did not involve price? Are differences
in the rule justified?
Class 23: November 16
Monopolization: Non-Price Exclusionary Conduct vs. Predatory Pricing
Chapter 6: 680-718, 745-746 (Cascade (2008), Trinko (2004))
Handout on United Regional (2011)
Preparation Questions
11
1. Did the bundled discounts offered by PeaceHealth in Cascade harm
competition?
2. What standard did the court apply to test whether those discounts
constituted predatory conduct sufficient to support a claim of attempted
monopolization? The approach applied to predatory pricing? The
approach applied to non-price conduct? A third approach? What standard
should be applied?
3. What are the pros and cons of applying different standards to evaluate
alleged exclusionary conduct in monopolization or attempted
monopolization cases depending on the nature of the conduct?
4. What did the Court hold in Trinko? Is the holding limited to settings in
which a complex regulatory framework exists to protect competition? To
cases brought by private plaintiffs? To cases in which the proposed relief
would require a monopolist to supply a rival with a key input or access to
the market?
5. How well does the idea of targeting “cheap exclusion” rationalize the
holdings of the monopolization cases we have read?
Class 24: November 18
Concerted Exclusionary Conduct: Exclusionary Group Boycotts
Chapter 7: 765-88 (Northwest Wholesale Stationers (1985), Visa (2003))
Chapter 8: 905-909
Preparation Questions
1. What distinction does the casebook make between exclusionary and
collusive group boycotts?
2. Did the conduct challenged in Northwest Wholesale Stationers harm
competition?
3. What legal rule did the Court employ to decide Northwest Wholesale
Stationers? What additional analysis would be undertaken under an
unstructured rule of reason that is not required under that rule?
4. Should it matter to the legality of an exclusionary group boycott whether
the boycotting firms possessed a dominant position? Why or why not?
5. Did the conduct challenged in Visa harm competition?
6. What legal rule did the appeals court employ to decide Visa?
7. Could the government have alleged an exclusionary group boycott in
Visa? Had it done so, would the court have analyzed the conduct
differently? Reached a different result?
12
Class 25: November 23
Concerted Exclusionary Conduct: Tying
Chapter 7: 788- 822 (Jefferson Parish (1982), Microsoft (2001))
Preparation Questions
1. Why is the conduct reviewed in Jefferson Parish a tie? How did the court
determine whether the seller had conditioned the sale of separate
products?
2. Did the tie in Jefferson Parish harm or benefit competition? Through what
mechanism?
3. What legal rule did the Court apply to analyze the tying claim in Jefferson
Parish?
4. Did the alleged tie in Microsoft harm or benefit competition?
5. What legal rule did the D.C. Circuit employ to analyze the tying claim in
Microsoft? How did it justify deviating from the rule applied in Jefferson
Parish?
6. Should the D.C. Circuit’s approach to analyzing tying allegations be
limited to ties involving platform software?
Class 26: November 25
Concerted Exclusionary Conduct: Exclusive Dealing
Chapter 7: 823-51 (Jefferson Parish (1984), Omega (1997))
Appendix A: 1254 (Clayton Act §3)
Preparation Questions
1. Is the Supreme Court’s approach to analyzing the exclusive dealing claim
in Jefferson Parish consistent with the approach employed in Tampa
Electric?
2. Would Jefferson Parish have come out differently if the incipiency standard
of Clayton Act §3 had been applied?
3. In Omega, did Gilbarco’s conduct harm competition?
4. Did the Omega plaintiff have antitrust injury?
Class 27: November 30
Vertical Mergers
Chapter 7: 851-73 (top) (Brown Shoe (1962), O’Neill (1987))
Handout on Comcast
13
Preparation Questions
1. Should the court in O’Neill have allowed the plaintiff to obtain discovery
on any theories of competitive harm?
2. Are efficiency explanations for vertical integration in O’Neill more
plausible than anticompetitive ones?
3. Did the Comcast/NBCU joint venture likely harm competition or benefit
competition through its consequences for video programming and video
distribution?
4. How does the FCC’s approach to merger review resemble or differ from
the way a court would approach the issue?
Class 28: December 2
Review
14