US Monopolisation

Attention to single-firm conduct has remained high in the US over the past 12 months. This is strikingly evident in the recent launch of the Federal Trade Commission’s (the FTC) investigation into Google. The Antitrust Division of the Department of Justice (the DoJ) also remained diligent in this area, bringing its first case since 1999 alleging monopolistic anti-competitive single-firm conduct. And private actions alleging anti-competitive single firm conduct show no signs of abating. The continued scrutiny of single-firm conduct is consistent with the Obama administration’s stated and continuing interest in this area of antitrust enforcement. In the current environment, businesses with significant market share are well-advised to conduct themselves with care.

Federal enforcement related to single-firm conduct is governed in the US by section 2 of the Sherman Act and section 5 of the FTC Act.1Section 2 prohibits, among other things, monopolisation and attempts to monopolise, including exclusionary and predatory practices by companies in positions of market power, and seeks to prevent the formation of monopolies that restrain competition.2 A monopoly exists when an enterprise exercises sufficient control over a particular product or service to determine significantly the terms on which others have access to it. Section 2 serves the same fundamental purpose as other provisions of US antitrust law: promoting a market-based economy that increases economic growth and freedom and that promotes competition in the marketplace. The theory behind monopolisation policy is that competition in a free market benefits consumers by facilitating lower prices, better quality and greater choice. Free competition enables businesses to compete on price and quality in an open market and on a level playing field, unhampered by anti-competitive restraints.

But promoting a healthy level of competition is a balancing act. While section 2 and the antitrust laws generally seek to thwart anti-competitive behaviour aimed at exclusive control in the marketplace, the antitrust laws also strive to avoid chilling aggressive competition and lawful ‘growth or development as a consequence of a superior product [or] business acumen.’3 Section 2, thus, does not aim to prevent firms from exercising monopoly power gained as a result of legitimate success. Rather, section 2 seeks to protect the process of competition by preventing the abuse or unlawful acquisition of monopoly power.Section 5 of the FTC Act vests the Federal Trade Commission with the power to challenge unfair methods of competition.4 ‘As interpreted by the US courts, section 5 enables the FTC to proscribe behaviour beyond conduct prohibited by the other federal antitrust statutes, including section 2.’5 The US Supreme Court has held that section 5 is broader than the other antitrust statutes.6 The FTC has shown a recent interest in using section 5 ‘to challenge single-firm conduct without relying directly on an underlying violation of section 2.’7 Commissioner Rosch has been at the forefront of the FTC’s effort to bring ‘free-standing or independent section 5 claims,’ that is, those found in that ‘rare, but important case in which the Commission challenges conduct beyond the Sherman Act’s limits under the theory that that conduct, whether or not it constitutes a violation of the Sherman Act, constitutes an unfair method of competition.”’8 Under this theory, a section 5 challenge to single-firm conduct would require a showing of anti-competitive effects together with incipient or actual monopoly power.9

Advocates of this approach, which has been viewed by some as controversial, cite a number of benefits flowing from this expanded use of section 5. First, section 5 may provide a better way than the Sherman Act to address unsettled questions of law.10 For example, a firm engaged in a course of conduct that has anti-competitive effects may not be liable under section 2; in such a case, section 5 could provide a more appropriate enforcement mechanism because an attempt to ‘shoehorn’ the facts of such cases into section 2 could result in bad law or allowing anti-competitive conduct to persist because it cannot be reached by section 2. Moreover, section 5 enforcement by the FTC does not carry with it the same risk of private treble damage follow-on suits that attends section 2 enforcement.11 This permits the FTC to bring its expertise to bear on novel or unusual claims, as well as incipient conduct, without inevitably subjecting the defendants to the devastating burdens of class action defence.12

FTC enforcement

The FTC has brought single-firm conduct enforcement to the front pages of the major newspapers with its intense focus on the high-tech sector, including, in particular, those companies with the largest internet presence. On 23 June 2011, Google confirmed in a federal regulatory filing that the FTC had issued a subpoena and civil investigative demand to the company, launching a broad, formal investigation into whether the internet behemoth has abused its dominance in web-search advertising.13 The FTC is also reportedly investigating Twitter and Facebook.14 The Twitter investigation may be looking at whether Twitter is excluding application developers from its platform in favor of its own applications and software.15 With respect to Facebook, the FTC is reportedly responding to a complaint relating to the social media giant’s online gaming currency.16

The Google probe has garnered significant media attention, but while the FTC has acknowledged the probe, it has not divulged its focus.17 Among the issues the FTC may be looking at is whether Google’s search results direct users unfairly to Google services over competing services of other providers and whether the amount Google charges for placing ads is determined unfairly. Google has been accused of manipulating its technology to lower the rankings of companies offering rival services and manipulating the auction process that determines how much companies pay to advertise in connection with specific search terms.18 Another business practice potentially in the FTC’s cross hairs is Google’s ‘comparison ad’ function, which allows users to compare advertisers’ products. Google then charges a fee for a detailed business referral.19 Critics such as Fairsearch.org (an organisation representing Microsoft, Expedia, Kayak and Sabre Holdings) also accuse Google of using other companies’ content without their permission, buying up competitive threats to its dominance and using its market power to put competitors out of business.20 The fear is that Google is abusing its dominance in search ads to extend its control to other markets, from mobile phones to online television, publishing, and airline travel.21

Google, according to ComScore, handles almost 70 per cent of US internet searches; worldwide market shares are also enormous, nearly reaching monopoly levels. Yahoo’s and Microsoft’s search services are distant No. 2 and No. 3 competitors, respectively. Microsoft’s deal with Yahoo, in which Yahoo’s sites are powered by Microsoft’s Bing search engine for the US and Canadian markets, has not improved their positions. (A proposed search-advertising deal between Google and Yahoo was deemed anti-competitive by the DoJ in 2008.)22

Google has been no stranger to antitrust scrutiny in recent years.23 The FTC has taken close looks at several of the company’s recent acquisitions, including DoubleClick, AdMob and ITA. These investigations have given the FTC ample opportunity to learn about the inner workings of Google, and Google’s attorneys have met several times with FTC officials to explain aspects of its business.24 Other technology companies have also discussed Google with the FTC.25 In addition, several states, including California, New York, Ohio and Texas, have launched investigations into Google’s business practices.26 And in Europe, where Google has been the target of several private actions, the European Commission (EC) is also investigating Google’s search result ranking practices, whether the company lowered ‘Quality Scores’ for sponsored links of competing vertical search services and whether it was imposing exclusivity obligations on advertising partners that prevented them from including competing ads on their websites or porting Google ad data to competing ad platforms.27

For its part, Google is unfazed by the spate of attacks, saying it is a natural consequence of its success and the fear engendered in other businesses when Google enters their markets. And, Google maintains, rivals such as Microsoft, which in April filed an antitrust complaint against Google in the EU, are behind many of the inquiries and legal challenges currently facing the company. (Microsoft denies this).28 Google has often maintained that, despite its market share, ‘competition is a click away.’29

Some have compared the FTC’s Google probe to the DoJ’s Microsoft investigation in the 1990s.30 There, the concern was that Microsoft controlled the platform (ie, its Windows operating system) that software developers needed to distribute their products and used that control to the disadvantage competitors. Here, the concern is that Google controls the platform (ie, displayed results of Google searches) that other companies need to compete and is using that control to the disadvantage of competitors.31 It is interesting that the government’s oversight of Microsoft ended in May, just as the FTC was preparing to investigate Google.32

The Google investigation also follows on the heels of the FTC’s challenge to unilateral conduct by Intel, a challenge that was resolved through settlement in August 2010.33 The FTC sued Intel in December 2009, alleging that the company used anti-competitive tactics to cut off competitors’ access to the market for microchips that comprise computers’ central processing unit, as well as those for graphics processing, which deprived consumers of choice and innovation in these markets.34 According to the FTC, Intel’s innovations in CPU technology fell behind those of its chief rival, AMD, leading Intel to resort to coercive tactics to limit AMD’s access to customers in the marketplace. Then, the FTC claimed, when Intel determined that higher capacity GPU chips manufactured by Nvidia lessened the need for Intel’s lower capacity CPU chips, thus threatening the value of Intel’s monopoly in the CPU market, Intel again responded by employing anti-competitive tactics similar to those used against AMD in the CPU market. The FTC challenged Intel’s practices under section 5, but not section 2, on the theory that the section 5 prohibitions against unfair competition and deceptive acts and practices are broader than those of section 2. The FTC also maintained that section 5 could not be used to establish liability for plaintiffs to seek treble damages in private litigation against Intel.

The FTC sought enormously broad injunctive relief. Among the 26 categories of relief requested by the Commission are provisions requiring Intel to license its technology to others upon terms and conditions to be decided by the Commission.35 If granted, this relief would have afforded the government unprecedented involvement in Intel’s affairs.

Under the settlement, Intel is prohibited from conditioning benefits to computer makers on their promise to buy chips from Intel exclusively or to refuse to buy chips from others, and retaliating against computer makers if they do business with non-Intel suppliers by withholding benefits from them. In addition, the FTC settlement order will require Intel to:

  • modify its intellectual property agreements with AMD, Nvidia, and Via so that those companies have more freedom to consider mergers or joint ventures with other companies, without the threat of being sued by Intel for patent infringement;
  • offer to extend Via’s x86 licensing agreement for five years beyond the current agreement, which expires in 2013;
  • maintain a key interface, known as the PCI Express Bus, for at least six years in a way that will not limit the performance of graphics processing chips, which will provide incentives to manufacturers of complementary, and potentially competitive, products to Intel’s CPUs to continue to innovate; and
  • disclose to software developers that Intel computer compilers discriminate between Intel chips and non-Intel chips, and that they may not register all the features of non-Intel chips; Intel also will have to reimburse all software vendors who want to recompile their software using a non-Intel compiler.36

The FTC’s settlement with Intel, which was an attempt to avoid drawn-out litigation, has been criticised as too quick. By settling with Intel, the FTC left uncertain the implications of the case on its more aggressive use of section 5, which must now wait until the underlying theory is tested in adversarial proceedings; confidence in the application of the theory will only be had after it ‘prevails in a contested matter and survives review in the appellate process.’37

DoJ enforcement

In February 2011, the DoJ, along with the Texas Attorney General, filed its first traditional anti-competitive single-firm conduct case under section 2 since 1999.38 According to the DoJ, United Regional Health Care System (URHCS), the dominant health-care provider in the region, entered into exclusive dealing contracts with certain health insurers with the purpose and effect of maintaining its monopoly for general acute-care inpatient hospital services and outpatient surgical services sold to commercial payors. URHCS simultaneously entered into a consent decree settling the case.39

According to the DoJ, URHCS’s share of the market for general acute-care inpatient hospital services is roughly 90 per cent, and its share of the market for outpatient surgical services is more than 65 per cent, in a geographic area that is ‘no larger than the Wichita Falls Metropolitan Statistical Area (MSA),’ which includes the counties of Archer, Clay and Wichita. Because URHCS is the largest hospital in the region and offers services such as obstetrics, cardiac surgery and high-level trauma that no other hospital in the region offers, commercial payers must have URHCS in their networks to be competitive.

The challenged URHCS contracts include a significant discount when URHCS is the only hospital or outpatient surgical centre in the insurer’s network, but include much less of a discount when the insurer contracts with any of URHCS’s competitors. The DoJ alleged that these provisions are exclusionary insofar as they impose a significant penalty on insurers who contract with competing service providers in the area, and anti-competitive because they were used to maintain a monopoly.

Moreover, according to the DoJ, URHCS imposed these provisions as a direct result of competition from other service providers in the area, such as Kell West. The effect, the DoJ maintained, was that insurers were essentially prohibited from contracting with competing hospitals in the area, which, in turn, delayed and prevented the expansion and entry of URHCS’s competitors, likely leading to higher health-care costs and higher health insurance premiums for patients, limited price competition for price-sensitive patients, likely leading to higher health-care costs for those patients; and reduced quality competition between URHCS and its competitors.40

The DoJ alleged that the exclusionary contracts were, in effect, de facto exclusive-dealing arrangements that offered insurers the illusion of choice but, in economic reality, offered no choice at all. Discounts conditioned on exclusivity can be pro-competitive if they spur price competition, but anti-competitive if they prevent equally or more efficient rivals from attracting additional consumers.41 Here, the DoJ argued, URHCS’s exclusivity discounts rendered its prices so low - below even URHCS’s incremental costs - that ‘a competing hospital would need to offer a price below United Regional’s incremental costs for an insurer to profitably turn down [URHCS’s] offer of exclusivity. As a result, United Regional’s discounts would likely exclude an equally efficient competitor.42 Because the DoJ found no pro-competitive justification to offset the anti-competitive nature of the discount provisions, it condemned the exclusivity contracts.

The DoJ and URHCS reached a settlement that prohibits URHCS from entering into contracts that improperly inhibit insurers from contracting with URHCS’s competitors. Under the terms of the settlement, URHCS may not condition prices or discounts offered to insurers based on whether those insurers contract with other health-care providers, may not otherwise inhibit insurers from entering into agreements with its rivals and may not retaliate against any insurers that enter into agreements with rival providers.

The URHCS case made good on outgoing assistant attorney general Christine Varney’s promise when she took the post to increase section 2 enforcement.43 As one of her first actions as head of the antitrust division of the DoJ, Varney withdrew controversial guidelines issued only eight months earlier that had significantly raised the bar for bringing a monopolisation case under section 2 of the Sherman Act. Varney said at the time that withdrawing the section 2 reports represented a ‘shift in philosophy and the clearest way to let everyone know that the Antitrust Division will be aggressively pursuing cases where monopolists try to use their dominance in the marketplace to stifle competition and harm consumers.’44

2011 also marked the expiration of the final judgment the DoJ obtained in its antitrust case against Microsoft, originally filed on 18 May 1998.45 The case involved claims that Microsoft sought to maintain its monopoly over computer operating systems by excluding competing middleware programs such as internet browsers and media players. Netscape, notably, complained that its Navigator web browser was excluded from fair competition in the US browser market. The DC Circuit upheld the DC district court’s finding that Microsoft had engaged in unlawful exclusionary conduct by obtaining contractual commitments from computer makers not to support middleware products that competed with Microsoft’s operating system, and by preventing consumers and computer makers from removing access to Microsoft’s middleware products in the operating system. The case was settled in 2002 with a final judgment. The DoJ touted the settlement as a triumph that has made [n]early every desktop middleware market, from web browsers to media players to instant messaging software, [...] more competitive today than it was when the final judgment was entered. In addition, the final judgment helped create competitive conditions that enabled new kinds of products, such as cloud computing services and mobile devices, to develop as potential platform threats to the Windows desktop operating system.’46 Microsoft, on the other hand, said in response to the expiration of the judgment that ‘Our experience has changed us and shaped how we view our responsibility to the industry. We are pleased to bring this matter to successful resolution...’47

Private party litigation

Private party litigation over various aspects of single-firm conduct has remained active. Predatory pricing has been the focus in a number of cases, with several plaintiffs failing to prove or plead below cost pricing. For example, in US Futures Exchange LLC v Board of Trade of the City of Chicago, Inc, the court granted summary judgment because the defendant’s prices were above both average variable and average total costs, and thus its prices for derivative exchange services were not predatory as a matter of law.48 In Mayfield SWD LLC v Blevins, the court granted the defendant’s motion to dismiss the plaintiff’s claim because the plaintiff merely alleged that the defendant offered low prices for disposal services around wells by paying cash to its drivers, but the allegations did not demonstrate that the defendant priced its services below cost.49 Similarly, in Astra Media Group LLC v Clear Channel Taxi Media LLC, the court granted the defendant’s motion to dismiss the plaintiff’s predatory pricing claim because the plaintiff did not demonstrate that the price the defendant charged for ‘taxi-tops’ was below an appropriate measure of cost.50 In AND Carting LLC v Finnochio Brothers, Inc, where a trash hauler alleged that its competitor had engaged in predatory pricing, cost recoupment was the issue.51 The court granted summary judgment, finding that the plaintiff could not demonstrate a dangerous probability that the defendant could recoup its investment in below-cost pricing.52

Not all plaintiffs stumbled, however. In Safeway, Inc v Abbott Laboratories, the court denied summary judgment on a predatory pricing claim.53 The plaintiffs alleged that Abbott Laboratories had bundled two pharmaceutical products together and charged below average variable cost on the competitive component of the bundle.54 The court held that the defendant had engaged in predatory pricing under Cascade Health Solutions v Peacehealth.55 Similarly, in Blue Sky the Color of Imagination LLC v MeadWestvaco Corp, the court applied the Cascade Health rule and denied the defendant’s motion to dismiss because the defendant was alleged to have used discounts it offered on school supplies to provide dated goods below cost.56

The essential facilities doctrine, despite a less-than-ringing endorsement by the US Supreme Court in Trinko,57 continues to live a vivid life in the lower courts. In Sunbeam Television Corp v Nielsen Media Research, Inc, the court held that a monopolist has no duty to assist its rival, especially when the rival can reasonably develop the resource it seeks from the monopolist or when the monopolist gets the resource through its own industrious effort, unless there appears to be an anti-competitive purpose on the part of the monopolist.58 Although the defendant in Sunbeam did not allow competitors or television stations with which it no longer had contracts to access previous years’ ratings (which the plaintiff alleged was essential for assessing the strength of TV stations present rating numbers), the court granted the defendant’s summary judgment on the essential facilities claim because the defendant had no anti-competitive purpose and thus was not required to give stations or competitors access to its records.59

However, in United National Maintenance, Inc v San Diego Convention Center, Corp, the court denied the defendant convention centre’s summary judgment motion on the plaintiff’s essential facilities claim. The court found that the defendant’s policy requiring that all cleaning services at trade shows be performed by its in-house cleaning staff, which the plaintiff alleged made it cost-prohibitive for other competitors to bid on cleaning services at the convention centre, created a triable issue as to whether the plaintiff and other competitors could compete for cleaning work at the convention centre.60

While the US enforcement agencies have reduced their emphasis on market definition in the recently released Horizontal Merger Guidelines, market definition remains a focus of private single-firm conduct litigation, with several courts relying on the plaintiffs’ failure to allege a proper market to dispose of antitrust claims. For example, in Wagner v Circle W Mastiffs, the court granted the defendant’s motion to dismiss the plaintiff’s claims because the plaintiff’s definition of the relevant market, the market for American Mastiffs, failed to ‘rise to the level of plausibility required by the federal pleading standards’ because other companion dogs are reasonably interchangeable alternatives to the American Mastiff.61 Similarly, in Vaughn Medical Equipment Repair Services LLC v Jordan Reses Supply Co, the court granted the defendant’s motion to dismiss the plaintiff’s monopolisation claims, finding that the plaintiff’s market definition was limited to one type of product, Respironic CPAPs, and to one customer, the United States Department of Veteran’s Affairs; the plaintiff failed to take account of reasonably interchangeable alternatives.62 Additionally, in Rock River Communications, Inc v Universal Music Group, Inc, the court granted the defendant’s summary judgment motion because the plaintiff’s definition of a market for reggae music in the United States failed to address the interchangeability of other genres of music with reggae.63 In Southeast Missouri Hospital v CR Bard, Inc, the Eighth Circuit affirmed the district court’s grant of summary judgment on market definition grounds.64 The plaintiff defined the market as catheters sold by the defendant through group purchasing organisation (GPO) contracts, which was inadequate because catheters sold through GPO contracts, although priced higher than catheters sold independently, were not distinct product submarkets from catheters sold through other channels.65 And in POURfect Products v KitchenAid, the court granted the defendant’s motion to dismiss because the plaintiff failed to allege any facts supporting a relevant product market for aftermarket attachments to KitchenAid stand mixers.66

Conversely, in Coalition for ICANN Transparency, Inc v Verisign, Inc, the Ninth Circuit reversed and remanded a district court’s determination that the plaintiff failed to define the relevant market.67 The Ninth Circuit held that the plaintiff’s definition of a market for ‘expiring domain names’ was adequate because expiring domain names have significantly more value than other domain names due to ‘established web traffic and advertising support.’68

Just as the major internet companies have attracted the attention of government antitrust regulators, so too have they garnered the interest of private antitrust litigants. In Facebook, Inc v Power Ventures, Inc, the defendant’s counterclaim alleged that Facebook engaged in anti-competitive conduct by unlawfully maintaining its monopoly through advertising to user’s on third party websites, but denying third party websites the ability to advertise on Facebook.69 The court granted Facebook’s motion to dismiss, finding no duty obligating Facebook to allow third-party websites unfettered access to its own website simply because they gave the privilege to Facebook.70 Similarly, in Universal Grading Services, Inc v eBay, Inc, the court granted eBay’s motion to dismiss, holding that eBay’s ‘Stamps and Counterfeit Policy’, a means of ensuring a safe online auction platform, was not alleged to have caused antitrust injury; eBay’s implementation of the policy did not reduce consumer’s choices or diminish the quality of their experience on other auction websites71

Courts have also addressed whether litigation can constitute anti-competitive conduct. In Scooter Store Inc v Spinlife.com LLC, the court denied plaintiff Spinlife’s motion to dismiss defendant Scooter Store’s monopolisation counterclaim in part because Scooter Store alleged that Spinlife had attempted to enforce a trademark in the ‘Scooter Store’ name ‘to expand its reach from insurance claims to the retail sale of goods’ in order to drive Scooter Store out of business.72 Similarly, in Coalition for ICANN Transparency, the court denied the defendant’s motion to dismiss in part because the defendant had engaged in litigation that was aimed at coercing the oversight body to perpetuate defendant’s role as exclusive regulator of the ‘.com’ domain name market.73

Patent misuse was the focus of one interesting case. In Nero AG v MPEG LA, LLC, the plaintiff alleged that the defendant made it impossible for licensees to acquire patents independently, expanded the scope of its monopoly by adding nonessential patents with later term expiration dates to its patent pools, and coerced licensees into an extended licence.74 The court granted the defendant’s motion to dismiss, holding that the plaintiff did not try to license the patents it needed individually; the patents identified by the plaintiff were already included in the pool at an earlier date or expired before some of the original patents in the pool and thus could not have been added to expand the scope of its monopoly; and that the plaintiff did not adequately explain how it was coerced into extended licenses.75

Though antitrust claims, particularly those addressed to single-firm conduct, are highly technical and difficult to prosecute to successful resolution, private litigants have not been shy about bringing them when dominant companies flex their muscles. The agencies, too, have set their sights on the big players. In this environment, antitrust counsel with clients who enjoy significant market shares must be quick to advise caution.

Notes

1
15 USC section 2 (2000).

2
15 USC section 2 (2000).

3
United States v Grinnell Corp, 384 US 563, 571 (1966).

4
15 USC section 45 (2000). Only the FTC has the authority to bring actions under section 5. And, as to single-firm conduct, section 5 is the only enforcement authority available to the FTC that ‘doesn’t have the authority to challenge anti-competitive conduct under the Sherman Act.’ See J Thomas Rosch, Commissioner, Federal Trade Commission, ‘The Great Doctrinal Debate: Under What Circumstances is Section 5 Superior to Section 2?’ Remarks before the New York Bar State Bar Association Annual Antitrust Conference, 27 January 2011, at 1, available at: www.ftc.gov/speeches/rosch/110127barspeech.pdf.

5
William E Kovacic and Marc Winerman, ‘Competition Policy and the Application of Section 5 of the Federal Trade Commission Act’, 76 Antitrust Law Journal No. 3, 929 (2010).

6
See J Thomas Rosch, Commissioner, Federal Trade Commission, ‘The Great Doctrinal Debate: Under What Circumstances is Section 5 Superior to Section 2?’ Remarks before the New York Bar State Bar Association Annual Antitrust Conference, 27 January 2011, at 2 n.2, (citing FTC v Ind Fed’n of Dentists, 476 US 447, 454 (1986) (‘The standard of unfairness” under the FTC Act is, by necessity, an elusive one, encompassing not only practices that violate the Sherman Act and the other antitrust laws, but also practices that the Commission determines are against public policy for other reasons.’) (citations omitted); FTC v Sperry & Hutchinson Co, 405 US 233, 240 (1972); FTC v Motion Picture Adver Serv Co, 344 US 392, 394-95 (1953) (‘the [FTC Act] was designed to supplement and bolster the Sherman Act and the Clayton Act to stop in their incipiency acts and practices which, when full blown, would violate those Acts...’) (citation omitted)) available at: www.ftc.gov/speeches/rosch/110127barspeech.pdf.

7
William E Kovacic and Marc Winerman, ‘Competition Policy and the Application of Section 5 of the Federal Trade Commission Act’, 76 Antitrust Law Journal No. 3, 929 (2010).

8
J Thomas Rosch, Commissioner, Federal Trade Commission, ‘The Great Doctrinal Debate: Under What Circumstances is Section 5 Superior to Section 2?’ Remarks before the New York Bar State Bar Association Annual Antitrust Conference, 27 January 2011, at 2 n.2, available at: www.ftc.gov/speeches/rosch/110127barspeech.pdf.

9
Intel, Apple, Google, Microsoft, and Facebook: Observations on Antitrust and the High-Tech Sector, Remarks of J Thomas Rosch, Commissioner, Federal Trade Commission, before the ABA Antitrust Section Fall Forum, 18 November 2010, at 15.

10
Id at 2. See also William E. Kovacic and Marc Winerman, Competition Policy and the Application of Section 5 of the Federal Trade Commission Act, 76 Antitrust Law Journal No. 3, 948 and n.83 (2010) (citing Thomas B. Leary, A Suggestion for the Revival of Section 5, Antitrust Source, Feb. 2009, available at: www.abanet.org/antitrust/at-source/09/02/Feb09-Leary2-26f.pdf; Susan B. Creighton & Thomas G. Krattenmaker, Appropriate Role(s) for Section 5, Antitrust Source, Feb. 2009, available at: www.abanet.org/antitrust/at-source/09/02/Feb09-Creighton2-26f.pdf).

11
Id at 3.

12
Id. See also William E Kovacic and Marc Winerman, ‘Competition Policy and the Application of Section 5 of the Federal Trade Commission Act’, 76 Antitrust Law Journal No. 3, 949-50 (2010)

13
Google Form 8-K, 23 June 2011, available at: www.sec.gov/Archives/edgar/data/1288776/000119312511172902/d8k.htm

14
Faaez Samadi, FTC presses on with online antitrust probes, Global Competition Review, Friday, 1 July 2011, available at: www.globalcompetitionreview.com/news/article/30329/ftc-presses-online-antitrust-probes/

15
Id.

16
Id.

17
The FTC reportedly won an inter-agency battle with the Antitrust Division of the Department of Justice for the right to pursue the Google case. See Thomas Catan and Amir Efrati, Feds to Launch Probe of Google, Wall Street Journal, 25 June 2011, available at: http://online.wsj.com/article/SB10001424052702303339904576403603764717680.html?KEYWORDS=google.

18
Don Clark and Ashby Jones, Google Probe Stirs Echoes of Microsoft Antitrust Case, Wall Street Journal, 25 June 2011, available at: http://online.wsj.com/article_email/SB10001424052702303339904576403603764717680-lMyQjAxMTAxMDAwODEwNDgyWj.html.

19
Thomas Catan and Amir Efrati, Feds to Launch Probe of Google, Wall Street Journal, 25 June 2011, available at: http://online.wsj.com/article/SB10001424052702303339904576403603764717680.html?KEYWORDS=google.

20
Id. Other companies critical of Google for such practices include TripAdvisor, WebMD, Yelp and CitySearch.

21
Id.

22
Kurt Mackie, Why is FTC Investigating Google?, Government Computer News, 27 June 2011, available at: http://gcn.com/articles/2011/06/24/ecg-google-under-us-investigation.aspx.

23
Google’s privacy policy has also been in enforcers’ cross hairs. Earlier this year, the company submitted to independent privacy audits for the next 20 years as part of a settlement with the FTC of claims it violated users’ privacy at its social network Buzz. See FTC Press Release: FTC Charges Deceptive Privacy Practices in Google’s Rollout of Its Buzz Social Network, 30 March 2011, available at: http://ftc.gov/opa/2011/03/google.shtm.

24
Thomas Catan and Amir Efrati, Feds to Launch Probe of Google, Wall Street Journal, 25 June 2011, available at: http://online.wsj.com/article/SB10001424052702303339904576403603764717680.html?KEYWORDS=google. And in 2008, the Antitrust Division of the Department of Justice blocked an advertising agreement between Google and Yahoo because the two companies would have controlled more than 90 per cent of the market.

25
Id.

26
Id.

27
Kurt Mackie, Why is FTC Investigating Google?, Government Computer News, 27 June 2011, available at: http://gcn.com/articles/2011/06/24/ecg-google-under-us-investigation.aspx.

28
Thomas Catan and Amir Efrati, Feds to Launch Probe of Google, Wall Street Journal, 25 June 2011, available at: http://online.wsj.com/article/SB10001424052702303339904576403603764717680.html?KEYWORDS=google.

29
Miguel Helft, Google Makes a Case That It Isn’t So Big, New York Times, 28 June 2009, available at: www.nytimes.com/2009/06/29/technology/companies/29google.html.

30
Don Clark and Ashby Jones, Google Probe Stirs Echoes of Microsoft Antitrust Case, Wall Street Journal, 25 June 2011, available at: http://online.wsj.com/article_email/SB10001424052702303339904576403603764717680-lMyQjAxMTAxMDAwODEwNDgyWj.html.

31
Id.

32
Ron Knox, DoJ Closes the Book on Microsoft Saga, Global Competition Review, 12 May 2011, available at: www.globalcompetitionreview.com/news/article/30096/doj-closes-book-microsoft-saga/.

33
Intel’s business practices in the market for computer microchips, in particular the global market for x86 microprocessors, had been for some time the subject of regulatory scrutiny and private litigation. On the regulatory side, beyond the FTC’s inquiry, the European Commission fined Intel $1.5 billion for purported abuses of its monopoly in the x86 market; antitrust regulators in Korea and Japan also imposed fines on the semiconductor giant. And the New York Attorney General filed a federal antitrust complaint alleging a ‘worldwide, systematic campaign of illegal conduct.’ On the private litigation side, Intel’s rival, Advanced Micro Devices, Inc, recently settled its long-running antitrust dispute with Intel for a reported $1.25 billion. Intel also settled class actions brought by shareholders.

34
In the Matter of Intel Corporation, FTC DOCKET NO. 9341, Complaint, at 22, available at: www.ftc.gov/os/adjpro/d9341/091216intelcmpt.pdf.

35
Id at 22.

36
FTC Press Release: FTC Settles Charges of Anticompetitive Conduct Against Intel, 4 August 2010, available at: www.ftc.gov/opa/2010/08/intel.shtm.

37
William E Kovacic and Marc Winerman, ‘Competition Policy and the Application of Section 5 of the Federal Trade Commission Act’, 76 Antitrust Law Journal No. 3, 941 (2010); see also Intel, Apple, Google, Microsoft and Facebook: Observations on Antitrust and the High-Tech Sector, Remarks of J Thomas Rosch, Commissioner, Federal Trade Commission, before the ABA Antitrust Section Fall Forum, 18 November 2010, at 6.

38
United States and State of Texas v United Regional Health Care System (D Tex 2011), available at: www.justice.gov/atr/cases/f267600/267651.pdf.

39
DoJ Press Release: Justice Department Reaches Settlement with Texas Hospital Prohibiting Anticompetitive Contracts with Health Insurers, 25 February 2011, available at: www.justice.gov/atr/public/press-releases/2011/267648.htm.

40
United States and State of Texas v United Regional Health Care System, Competitive Impact Statement at 4, available at: www.justice.gov/atr/cases/f267600/267653.pdf

41
United States and State of Texas v United Regional Health Care System, Complaint at 14, available at: www.justice.gov/atr/cases/f267600/267651.pdf.

42
Id at 16.

43
Varney announced on 6 July 2011, that she was leaving the DoJ for private practice.

44
DoJ Press Release: Justice Department Withdraws Report On Antitrust Monopoly Law, 11 May 2009, available at: www.justice.gov/atr/public/press_releases/2009/245710.htm.

45
DoJ Press Release: Microsoft Antitrust Final Judgment Expires May 12, 11 May 2011, available at: www.justice.gov/atr/public/press_releases/2011/271042.htm.

46
Id.

47
Jenna Greene, At Long Last, Government Case Against Microsoft Has Ended, Law.com, 17 May 2011, available at: www.law.com/jsp/cc/PubArticleCC.jsp?id=1202493968397&At_Long_Last_Government_Case_Against_Microsoft_Has_Ended.

48
2010 US Dist LEXIS 66049, at *8 (ND Ill, 2 July 2010).

49
2010 US Dist LEXIS 5617, at *21 (WD Okla, 19 January 2011).

50
2011 US App LEXIS 2949, at *4 (2d Cir, 15 February 2011).

51
2010 US Dist LEXIS 89660, at *6 (D Conn, 31 August 2010).

52
Id.

53
2011 US Dist LEXIS 4985, at *34 (ND Cal, 14 January 2011).

54
Id at *30-31.

55
515 F3d 883, 906 (9th Cir 2008); Safeway, 2011 US Dist LEXIS 4985, at *30

56
2010 US Dist LEXIS 118946, at *10 (CD Cal, 23 September 2010).

57
Law Offices of Curtis V Trinko v Verizon, 540 US 398 (2004) (‘We have never recognized such a doctrine...’). But see US v Terminal Railroad Assn of St Louis, 224 US 383; (1912); Lorain Journal Co v United States, 72 S Ct 181 (1951); Otter Tail Power Co v United States, 410 US 366 (1973). These cases do not use the term ‘essential facilities doctrine,’ but they can fairly be read to embrace the concept.

58
2011 US Dist LEXIS 3740, at *20-21 (SD Fla, 13 January 2011).

59
Id at *21. The essential facilities doctrine was also raised in DocMagic, Inc v Ellie Mae, Inc, 755 F Supp 2d 1119 (ND Cal 2010), where the claim was dismissed at the pleading stage; the plaintiff failed generally to allege facts sufficient to show a dangerous probability of attaining market power.

60
2010 US Dist LEXIS 78322, at *19-21 (SD Cal, 3 August 2010). San Diego Convention Center was one of very few cases in the last year where section 2 plaintiffs survived summary judgment; see also Safeway, 2011 US Dist LEXIS 4985, discussed above; In re Southeastern Milk Antitrust Litigation, 730 F Supp 2d 804 (ED Tenn, 4 August 2010) (conspiracy to monopolise claim).

61
732 F Supp 2d 792, 803-04 (SD Ohio 2010).

62
2010 US Dist LEXIS 88958, at *59-60 (ED La, 26 August 2010).

63
2011 US Dist LEXIS 46023, at *46-47 (CD Cal, 27 April 2011).

64
2011 US App LEXIS 11552, at *24 (8th Cir 2011).

65
Id.

66
2010 US Dist LEXIS 90869, at *5-11 (D Ariz 2010).

67
611 F3d 495, 509 (9th Cir 2010).

68
Id at 507-509.

69
2010 US Dist LEXIS 93517, at *39-41. (ND Cal, 20 July 2010).

70
Id at 41.

71
2011 US Dist LEXIS 25193, at *23-26 (ND Cal, 8 March 2011).

72
2011 US Dist LEXIS 32654, at *28-29 (SD Ohio, 28 March 2011).

73
611 F3d at 506.

74
2010 US Dist LEXIS 119030, at *4-14 (CD Cal, 24 November 2010).

75
Id.

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