Hylton, Keith N. --- "The Law and Economics of Monopolization Standards" [2010] ELECD 273; in Hylton, N. Keith (ed), "Antitrust Law and Economics" (Edward Elgar Publishing, 2010)

Book Title: Antitrust Law and Economics

Editor(s): Hylton, N. Keith

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847207319

Section: Chapter 5

Section Title: The Law and Economics of Monopolization Standards

Author(s): Hylton, Keith N.

Number of pages: 34

Extract:

5 The law and economics of
monopolization standards
Keith N. Hylton*


I Introduction
Monopolization, the restriction of competition by a dominant firm, is
regulated in roughly half of the world's nations.1 The two most famous
laws regulating monopolization are Section 2 of the Sherman Act,2 in the
United States, and Article 82 of the European Community Treaty.3 Both
laws have been understood as prohibiting `abuses' of monopoly power.
In this chapter I will review the law on monopolization in the US, with
a view toward identifying the legal tests for monopolization. I will also
review the literature on monopolization standards. Since both the law and
literature on monopolization are older and more developed in the US, it is
no serious drawback to focus only on the Sherman Act and related litera-
ture. The issues addressed here apply equally well to monopolization law
outside of the US.
In general, two approaches to distinguishing lawful from unlawful
monopolization have appeared in the law and in the literature: a specific
intent approach and welfare balancing approach. These are general cat-
egories that contain several specific versions.4 The key difference is that
the specific intent approach condemns monopolizing acts when it appears
that the dominant firm's sole purpose was to destroy competition. The
welfare balancing approach condemns monopolizing acts after balancing
anticompetitive effects against some notion of procompetitive benefits.
I set out models of the various monopolization tests in an effort to
clarify the distinctions and to raise ...