Antitrust—Government Hearings

The Antitrust Division of the Department of Justice [hereinafter DOJ] and the Federal Trade Commission [hereinafter FTC] have announced that they will hold public hearings in the spring to discuss single-firm behavior.^[1] The goal of the hearings “is to examine whether and when specific types of single-firm conduct are pro-competitive or benign, and when they may harm consumers.”^[2] Of particular interest to the DOJ and the FTC are developing “areas of consensus” and advancing their “state of knowledge regarding the proper treatment” of single-firm conduct.^[3] Developing clear standards might help businesses comply with antitrust laws because, as FTC Chairman Deborah Platt Majoras says, “over-enforcement of the monopolization laws leads to high false positives that chills pro-competitive behavior that benefits consumers. Under-enforcement, however, may result in false negatives in which firms continue to engage in exclusionary conduct that harms consumers.”^[4]

Single-firm conduct is governed by section 2 of the Sherman Antitrust Act, codified at 15 U.S.C. § 2. Under this section, it is a crime for a firm to monopolize, attempt to monopolize, or combine or conspire with any one else, to monopolize any part of the trade or commerce among the several States, or with foreign nations. The penalty for doing so is a fine of not more than $10 million for a corporation, or $350,000, imprisonment for up to 3 years, or both, if done by a natural person.
Determining what exactly constitutes monopolizing conduct, however, is an especially difficult question, and participants in the hearings will examine and discuss the standards used in recent DOJ enforcement actions against Microsoft, American Airlines, and Dentsply, as well as FTC cases against Intel, Unocal, and Rambus.^[5] Furthermore, global concerns about antitrust behavior will be addressed, because “In an increasingly globalized economy, in which transactions can have an impact on multiple jurisdictions, it is imperative that U.S. businesses understand the appropriate line between procompetitive and anticompetitive single-firm conduct and that U.S. antitrust enforcers are able to discuss and share with their foreign counterparts the latest legal and economic scholarship relating to these issues.”^[6]

We recently discussed one of the largest criminal antitrust penalties here.

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[1] DOJ, DOJ and FTC to Hold Joint Public Hearings on Competition Policy Related to Single-Firm Conduct, Nov. 28, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.