The Antitrust Review of the Americas 2009

Monopolisation by Deception

The Antitrust Practice Group

01 January 2009

Determining the nature and type of conduct that may expose a firm to claims of monopolisation under section 2 of the Sherman Act1 is always an interesting challenge. Certain types of conduct - for example, predatory pricing and refusals to deal - have received more attention from the courts and have benefited from the development of a more extensive framework for their analysis. One area of potentially monopolising conduct - deception and the circumstances in which it can constitute monopolising conduct - is relatively underdeveloped. Recognition that deceptive conduct could serve as the basis for a monopolisation claim came more than 40 years ago at the intersection of intellectual property and antitrust law, with the US Supreme Court's 1965 decision in Walker Process Equipment Inc v Food Machinery and Chemical Corp.2 The court held that obtaining a patent on the basis of knowing and wilful misrepresentations to the patent office could serve as the conduct basis of a section 2 monopolisation claim when the patent was then used to exclude competition.3 Since then, cases that rely solely or primarily on deceptive conduct (other than those involving fraud on the patent office) have arisen sporadically and in varying circumstances. Many cases have stayed close to the Walker Process origins and involve patented technology and often also involve a standard-setting organisation (SSO). Other cases are entirely unrelated to patents or technology. This article will briefly review a number of deception-based monopolisation cases and will then provide an analytical overview for discerning when deceptive conduct could serve as the basis for a section 2 claim.

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