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  ![](media/image1.png){width="0.8791666666666667in"   **DEPARTMENT OF JUSTICE**
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The Gales of Creative Destruction:\
The Need for Clear and Objective Standards\
for Enforcing Section 2 of the Sherman Act

THOMAS O. BARNETT

Assistant Attorney General

Antitrust Division

U.S. Department of Justice

Opening Remarks for the

Antitrust Division and Federal Trade Commission

Hearings Regarding Section 2 of the Sherman Act

Washington, D.C.

June 20, 2006

Introductory Remarks for the Section 2 Hearings

On behalf of the Antitrust Division, I thank the Chairman of the Federal
Trade Commission, Debbie Majoras, Commissioners Pamela Jones Harbour,
Jon Leibowitz, Bill Kovacic, and Thomas Rosch, and all Federal Trade
Commission staff helping to sponsor these hearings. Not only are they
gracious hosts, but, in the process of developing these hearings, they
have already shared productive insights regarding many difficult issues
surrounding the treatment of unilateral conduct under the antitrust
laws. The Federal Trade Commission and the Antitrust Division share a
common goal of protecting competition and promoting consumer welfare,
and these hearings will help both agencies better fulfill that mission.

I also want to thank Professor Herbert Hovenkamp and Professor Dennis
Carlton for joining Chairman Majoras and me at this opening session and
providing their insights and perspectives in this critical area of
antitrust enforcement.

Finally, I also thank the Antitrust Division staff who have helped and
will continue to help organize what promises to be fruitful discussion
about unilateral conduct throughout the remainder of the year.

My remarks today will address why the Antitrust Division is
co-sponsoring hearings on unilateral conduct and also touch on some of
the more difficult issues facing the Antitrust Division, the courts, the
antitrust bar, and the business community.

Why is the Antitrust Division co-sponsoring hearings about unilateral
conduct?

The Antitrust Division is co-sponsoring these hearings to help advance
our own thinking about unilateral conduct and better inform our judgment
about when it is appropriate for the United States to bring enforcement
actions under Section 2 of the Sherman Act. Antitrust experts continue
to advance the understanding of the different ways that firms
unilaterally can---and cannot---harm competition. The Antitrust Division
tries to incorporate the latest scholarship and economic thinking into
its enforcement decisions, and these hearings will help us meet that
goal by providing a forum for experts to review the literature, the
business practices, and the law and to speak directly to each other and
to us. A number of prominent practitioners and economists have committed
to participate in these hearings, and the Antitrust Division is grateful
to them for agreeing to share their insights. We are also seeking the
views of the business community, consumer groups, and business
historians. Those views are significant to our understanding of the
real-world implications of various business practices and their
potential impact on competition. Improving the legal system helps us
all, and I commend those who contribute through either written
submissions or panel participation for rendering a valuable public
service.

A second reason for these hearings is to advance the development of the
law, particularly by articulating points of consensus. Developing the
law---or, more accurately, influencing the development of the law---in
ways that help competition is an important goal for the Antitrust
Division. Courts routinely rely on the Antitrust Division's views when
construing the antitrust laws.

That reliance benefits us all. For example, one of the Antitrust
Division's greatest achievements is the merger guidelines, for which
great credit goes to former Assistant Attorneys General Don Turner, for
the first merger guidelines in 1968, and Bill Baxter for his highly
influential 1982 formulation. These merger guidelines and their
subsequent iterations have increased transparency regarding
merger-enforcement policy and improved merger-enforcement practice. But
they have also had a profound effect on the rational development of
merger law. Today, courts, commentators, and practitioners ground merger
analysis within the sound framework of the merger guidelines.

Other Antitrust Division policy statements, particularly those where the
Federal Trade Commission and the Antitrust Division speak together, have
also had significant influence. Indeed, the Supreme Court and courts
from each judicial circuit have relied on Antitrust Division enforcement
policy when construing the antitrust laws.[^1] I hope that these
hearings and the report that the Federal Trade Commission and the
Antitrust Division intend to publish together after they conclude will
be helpful to courts when they are called upon to review unilateral
conduct. Similarly, I hope the hearings generate helpful guidance for
businesses seeking to comport with antitrust law's obligations.

It is also worth noting that Federal Trade Commission and Antitrust
Division policy affects not just antitrust law here in the United States
but also antitrust law around the world. Many countries have adopted
competition laws, and they often draw upon the antitrust traditions of
the United States when both promulgating and construing their own laws.
By demonstrating areas of consensus and framing open questions in a
manner that focuses on consumer welfare, these hearings will provide a
valuable resource for countries looking to develop sound antitrust laws
of their own---and help all countries converge on procompetitive
principles even in those areas where there is not yet a consensus.

Finally, as I will shortly discuss in more detail, the Supreme Court's
recent decision in *Trinko*[^2] and request for the views of the United
States in *Weyerhaeuser*[^3] indicate the Court's renewed interest in
unilateral-conduct issues and make these hearings particularly timely.

Substantive Comments

Now for some substantive observations. The Supreme Court rendered its
first significant decision construing Section 2 of the Sherman Act
96 years ago. In *Standard Oil*, the Court identified three "evils which
led to the public outcry against monopolies" and, ultimately, to
Section 2 of the Sherman Act: first, the power "to fix the price and
thereby injure the public"; second, the power "of enabling a limitation
on production"; and third, the "danger of deterioration in quality of
the monopolized article which it was deemed was the inevitable resultant
of the monopolistic control over its production."[^4]

Those same concerns---price increases, output reductions, and quality
deterioration---are still crucial to our thinking about monopoly.
Conduct that does no more than permit price increases and output
reductions unambiguously hurts competition and consumers. To illustrate
that harm, economics provides the helpful visual of the deadweight loss
triangle that is familiar to all students of antitrust.[^5]

But the effects of monopoly with respect to product development and
innovation are less clear. Considerable tension between two ideas
exists. On one hand, monopoly has the potential to inhibit competitive
zeal. As Nobel laureate John Hicks noted over 70 years ago:

It seems not at all unlikely that people in monopolistic positions . . .
are likely to exploit their advantage much more by not bothering to get
very near the position of maximum profit, than by straining themselves
to get very close to it. The best of all monopoly profits is a quiet
life.[^6]

In other words, new products and cost reductions that would help
consumers may come either late or not at all as a result of monopoly's
potential to inhibit competitive fervor.

But there is another side to monopoly. The potential to obtain monopoly
profits serves as an important incentive to create better products for
consumers. As the Supreme Court has observed:

The mere possession of monopoly power, and the concomitant charging of
monopoly prices, is not only not unlawful; it is an important element of
the free-market system. The opportunity to charge monopoly prices---at
least for a short period---is what attracts "business acumen" in the
first place; it induces risk taking that produces innovation and
economic growth.[^7]

That feature of monopoly is in accord with Harvard economist Joseph
Schumpeter's observation that high profits serve as "baits that lure
capital on to untried trails," thereby producing a "perennial gale of
creative destruction" resulting in better ways to satisfy our needs and
desires.[^8] The existence of firms with large market shares does not
necessarily or even typically reflect competitive harm---to the
contrary, firms typically obtain large market shares by offering
products that consumers prefer over other firms' offerings.

The Supreme Court raised the right issues about monopoly a century ago
in *Standard Oil*. Now it behooves us to ask how the antitrust community
has done creating appropriate standards for assessing unilateral
conduct. Two of antitrust's most distinguished scholars examined that
question last year and gave somewhat disheartening answers. Judge Posner
offered that antitrust policy toward "unilateral abuses of market power"
is "the biggest *substantive* issue facing antitrust,"[^9] and Professor
Hovenkamp---who will likely reiterate it today---concluded that
"\[n\]otwithstanding a century of litigation, the scope and meaning of
exclusionary conduct under the Sherman Act remain poorly defined."[^10]

R.W. Grant provided a lighthearted critique of these problems in his
1964 verse detailing the rise and fall of Tom Smith and his Incredible
Bread Machine. Mr. Smith invented a machine that would bake, slice, and
wrap bread for less than a penny. His invention leads him to dominate
the bread market---until he is brought down by an antitrust suit. In a
poem, the "men in Antitrust" provide Tom the following "simple
guidelines" for complying with the antitrust laws:

You're gouging on your prices if\
You charge more than the rest.\
But it's unfair competition\
If you think you can charge less!\
A second point that we would make\
To help avoid confusion:\
Don't try to charge the same amount!\
That would be collusion.\
You must compete---but not too much\
For, if you do, you see\
Then the market would be yours---\
and that would be monopoly![^11]

As you probably discern, these guidelines express the frustration of a
successful entrepreneur who does not know how to conform his behavior to
the antitrust laws---at least without abandoning his machine that
brought cheap bread to millions of the world's hungry.[^12]

While things have progressed since 1964, confusion about Section 2 still
exists because discerning whether a monopolist's actions have hurt or
helped competition can be extremely difficult. Conduct that does no more
than enable a monopolist to restrict output and maintain price above the
competitive level unambiguously hurts competition and consumers. As
former Deputy Assistant Attorney General Douglas Melamed noted in a
recent article, these forms of "naked exclusion" are an obvious and easy
target.[^13] At the other end of the spectrum, conduct that simply
reduces a monopolist's own costs is an obvious and easy candidate for a
safe harbor. The trouble is knowing when more is at stake and designing
sensible rules for those situations where challenged conduct potentially
has both beneficial and exclusionary effects.

The Supreme Court's two most recent significant decisions concerning
Section 2 of the Sherman Act---*Brooke Group*[^14] and *Trinko*---take
important steps toward unraveling these difficulties. Although the
holdings in both are narrow, the reasons for those holdings have
significantly broader applicability.

*Brooke Group* concerned predatory pricing, and the Court's specific
holding was that Liggett had not demonstrated that recoupment---an
essential element of any predatory pricing claim---was likely.[^15] But
the steps leading to that conclusion are important in many Section 2
contexts.

One of those steps was the Court's recognition that it is a mistake to
reflexively infer harm to competition from harm to a competitor. Even
though "volume rebates directed at Liggett's biggest wholesalers"
plainly hurt Liggett, the Supreme Court found no harm to competition,
correctly noting that a competitor's "painful losses" are "of no moment
to the antitrust laws if competition is not injured."[^16]

Two other important points are implicit in the Court's recognition of a
safe harbor for pricing that is above "an appropriate measure of . . .
costs."[^17] The first concerns the Court's consideration of the
"practical ability of a judicial tribunal" to control the
anticompetitive effect of prices above a relevant measure of cost
without "chilling legitimate price cutting."[^18]

The second, related point is that good antitrust policy sometimes
requires recognizing safe harbors that insulate from liability some
conduct that might hurt competition. A safe harbor that may permit some
anticompetitive conduct is appropriate if adopting the safe harbor
promotes even greater competitive benefits. In *Brooke Group*, the Court
recognized the possibility that above-cost pricing might hurt
competition but nonetheless insulated above-cost pricing from liability
to avoid the greater harm of a legal regime that would cause firms to
hesitate before lowering their prices or not to lower prices at
all.[^19] Our panelists will consider whether similar safe harbors would
be appropriate in other areas of single-firm conduct where firms might
hesitate to reduce prices or introduce new products out of fear of
antitrust liability.

*Trinko* is the Supreme Court's most recent decision under Section 2,
and it too contains a number of important observations beyond its
specific holding. The Court held that Verizon's alleged refusal to
provide services to its rivals did not violate Section 2 because, among
other things, (1) assessing the challenged conduct posed a risk of
"\[m\]istaken inferences and . . . resulting false condemnations" and
(2) a federal court was "unlikely to be an effective day-to-day enforcer
of the\[\] detailed sharing obligations" requested by plaintiff.[^20]
Although that holding is tied to the specifics of plaintiffs' claims and
the requested relief, the policies underlying it again have broad
applicability.

First, the Court recognized that the "costs" of "antitrust intervention"
must be weighed against its "benefits."[^21] The anticompetitive conduct
alleged---violations of Verizon's regulatory obligations---was not
obviously procompetitive like the low pricing at issue in *Brooke
Group*. But the Court nonetheless viewed the "cost of false positives"
as a factor favoring dismissal.[^22] That underscores the need for
robust tests allowing accurate assessments of when challenged conduct
does, and does not, hurt competition.

A second element of the *Trinko* holding cutting across many Section 2
areas concerns the issue of remedy. Agreeing with Professor Areeda that
"'\[n\]o court should impose a duty to deal that it cannot explain or
adequately and reasonably supervise,'" the Court counted plaintiffs'
request for "continuing supervision of a highly detailed decree" as a
factor weighing in favor of dismissal.[^23] Although the issue of relief
was not itself dispositive, the Court's discussion recognizes that not
all problems have antitrust solutions.

Another recent Supreme Court development also worth noting is a pending
request for review of the Ninth Circuit's *Weyerhaeuser* decision.[^24]
That case specifically involves the issue of predatory bidding. Although
allegations of predatory bidding are infrequent, the decision
nonetheless presents important questions regarding Section 2.
Specifically, asking a jury whether a firm purchased a scarce resource
at a "fair price"[^25] is an unsound way to apply the antitrust laws. As
the United States and the Federal Trade Commission urged in our brief
supporting the request for certiorari, the Supreme Court has the
opportunity to make a significant contribution to Section 2
jurisprudence by clarifying that simply asking whether a business
practice comports with a jury's sense of fairness is not appropriate.

Notwithstanding these recent Supreme Court cases, there are still many
areas of uncertainty regarding the implications of single-firm conduct.
This is partially because firms constantly try new ways of doing things,
and our understanding of new business practices is often dim at first.
As Judge Easterbrook observed over twenty years ago, "\[t\]he gale of
creative destruction produces victims before it produces economic
theories and proof of what is beneficial."[^26] That is why it is
important to discuss not only existing business practices but also broad
principles that can readily be applied to new developments in the
business world.

Our first panel this Thursday will discuss predatory pricing. While
*Brooke Group* established important principles for resolving predatory
pricing claims---including the need for recoupment---significant
questions still remain. There is still debate regarding the appropriate
cost measure against which a firm's pricing decisions should be judged.
Another important issue for predatory pricing concerns relief, which is
a particularly sensitive issue when assessing whether government
enforcement is appropriate. Our second panel Thursday will address
predatory bidding and offer perspectives on not only *Weyerhaeuser* but
predation schemes in general.

Panels later in the year will address a range of issues. In July, a
panel will discuss refusals to deal and the fundamental question of
whether a competitor should ever be compelled to deal with its rivals
and, if so, under what circumstances. Relief in such cases again raises
difficult questions, such as setting and monitoring the commercial terms
of compelled business relationships.

Subsequent panels will explore other types of single-firm conduct where
further guidance is needed. Panelists will explore the difficult issues
surrounding bundled discounts, market share discounts, or other kinds of
loyalty discounts. Two years ago, the United States and the Federal
Trade Commission told the Supreme Court in its amicus brief opposing
certiorari in *LePage's* that the legal and economic principles
governing this complex area warranted further development before it
would be ripe for Court review.[^27] Since then, commentators have
focused significant attention on these practices, and our panelists will
consider whether that outpouring has resulted in any areas of agreement.
Panelists will address such questions as whether these rebate
arrangements are akin to predatory pricing, tying, or exclusive dealing,
and also whether consensus exists as to any safe harbors where harm to
competition is unlikely.

Tying and exclusive dealing will also be explored in subsequent panels.
An important issue in those sessions will be how procompetitive effects
can be detected and assessed accurately. Because these practices
frequently occur in competitive markets, it is logical to assume that
they frequently generate efficiencies. Yet the economic understanding of
these efficiencies is not necessarily well-developed, and our panelists
will explore whether any consensus exists regarding the scope of the
pro- and anti-competitive effects of these common business practices. In
addition, both tying and exclusive dealing arrangements can sometimes
take the form of unilateral refusals to deal, again raising sensitive
remedial issues.

Our final panels at the end of this year will consider issues cutting
across specific business practices that apply generally in any Section 2
matter. There are, of course, many issues that arise in nearly all
Section 2 matters that remain unsettled and deserve attention. Among
these is an issue as basic as defining the elements of a Section 2
claim. We can all agree, I hope, on the general principle of preventing
harm to consumer welfare. Translating that general principle into a more
operational definition, however, presents challenges. The Supreme
Court's most frequently cited recitation of the elements of a Section 2
claim---Number range CHAPTER"(1) the possession of monopoly power in the
relevant market and (2) the willful acquisition or maintenance of that
power as distinguished from growth or development as a consequence of a
superior product, business acumen, or historic accident"[^28]---is
widely criticized for providing insufficient guidance to businesses
considering whether to undertake a practice that may not fit neatly
within prior precedent.

Whether there is a more precise definition that can be used in all
Section 2 contexts has generated significant debate. Different tests for
determining whether conduct violates Section 2 have been proposed, but
none has achieved consensus yet.[^29]

One of those tests---asking whether the conduct at issue makes economic
sense but for its tendency to reduce competition---has been used at the
Antitrust Division to guide our prosecutorial discretion in a number of
recent Section 2 matters. When conduct does not make economic sense but
for its tendency to reduce competition, an enforcement action may well
be appropriate, depending on, among other things, the magnitude of the
competitive harm, the potential of private litigation to remedy the
underlying conduct, the importance of the issue to the economy, and the
ability of the courts to grant effective relief. When conduct makes
economic sense for reasons other than reducing competition, additional,
difficult questions arise, including concerns about the potential to
chill procompetitive conduct, the potential of significant
anticompetitive harm continuing unabated, and the burdens imposed on
courts when they are asked to balance procompetitive and anticompetitive
effects. We look forward to an open discussion and debate on the
benefits and shortcomings of this test, how it could best be applied,
and whether this or some other test leads to the best results for
competition.

An additional issue that arises in many Section 2 cases is whether
Section 2 of the Sherman Act imposes duties that are different from the
duties imposed by other provisions of the antitrust laws. A number of
the business practices to be discussed during these hearings are also
subject to other provisions of the antitrust laws. Tying and exclusive
dealing, for instance, have been challenged under Section 1 of the
Sherman Act and Section 3 of the Clayton Act as well as Section 2 of the
Sherman Act. One question for panelists to consider, therefore, is
whether the analysis of the conduct should differ depending on the
statutory context.

These hearings will help us to develop clear and objective standards
that will apply in all Section 2 matters. As we commence discussions,
let me mention six broad principles that already inform Antitrust
Division enforcement policy under Section 2. Informing these principles
is, among other things, our desire to be credible stewards of the
antitrust laws and worthy of the trust the people of the United States
have bestowed on us to enforce the antitrust laws in beneficial ways.

First, individual firms with monopoly power can act anticompetitively
and harm consumer welfare, and we should seek to identify and prosecute
such conduct.

Second, mere size does not demonstrate harm to competition or a
violation of the antitrust laws. The proper focus of antitrust law is on
anticompetitive conduct and effect, not just size or market share.

Third, mere injury to a firm does not itself show that competition has
suffered. Indeed, a firm's inability to garner sales may indicate no
more than the superiority of its competitors' products. Put another way,
recalling Tom Smith and his Incredible Bread Machine, Tom should not
have been penalized for inventing a machine that produced great bread at
low cost. The goal of the antitrust laws is to protect competition, not
competitors.

Fourth, both consumers and the business community benefit from clear,
administrable, and objective rules that both allow businesses to assess
the legality of a practice before acting and enable enforcers and courts
to judge challenged conduct predictably and correctly. This is
particularly true in the context of single-firm conduct. At the back
end, unclear rules have the potential to condemn some procompetitive
conduct yet condone other conduct that harms competition. That leads to
a potentially even more significant problem on the front end. Ambiguous
rules or rules depending on the intent of a firm's employees or future
unknown events may chill businesses from undertaking procompetitive
conduct, such as cutting prices, investing, and innovating, in the first
place. Thus, the challenge is to develop clear, objective standards that
businesses can follow and are also administrable for enforcers, courts,
and juries.

Fifth, Section 2 of the Sherman Act should be construed to avoid
chilling procompetitive conduct. As our other speaker today, Professor
Carlton, has noted, "\[e\]fficiencies are hard to measure, and the
benefit of the doubt should go to defendants, not to plaintiffs;
otherwise, the continued generation of the large efficiency benefits
responsible for raising our standard of living will be
jeopardized."[^30] It is important to remember that every time a firm is
kept from engaging in aggressive conduct because it fears an
unnecessarily expansive interpretation of the antitrust laws,
competition is harmed.

The sixth and final point concerns the importance of remedy. A remedy
needs to be effective and administrable by courts and agencies without
restricting competition. A remedy that harms competition is worse than
no remedy at all.

To conclude, I want again to thank the Federal Trade Commission, our
panelists, and particularly Professors Carlton and Hovenkamp for
agreeing to kick-off these hearings. After today's presentations, the
hearings will continue Thursday with panel discussions concerning
predatory pricing and predatory bidding and then proceed through the
remainder of the year. All interested parties are cordially invite to
attend. Thank you.

[^1]: *E.g.*, *Ill. Tool Works Inc. v. Indep. Ink, Inc.*, 126 S. Ct.
    1281, 1292 (2006); *Unitherm Food Sys., Inc. v. Swift-Eckrich,
    Inc.*, 375 F.3d 1341, 1364 (Fed. Cir. 2004), *rev'd on other
    grounds*, 126 S. Ct. 980 (2006); *Paladin Assocs., Inc. v. Mont.
    Power Co.*, 328 F.3d 1145, 1155 (9th Cir. 2003); *Fraser v. Major
    League Soccer, L.L.C.*, 284 F.3d 47, 71 (1st Cir. 2002); *SBC
    Commc'ns Inc. v. FCC*, 56 F.3d 1484, 1493-94 (D.C. Cir. 1995); *SCFC
    ILC, Inc. v. Visa USA, Inc.*, 36 F.3d 958, 965 & n.8 (10th Cir.
    1994); *FTC v. Univ. Health, Inc.*, 938 F.2d 1206, 1223 (11th Cir.
    1991); *Ball Mem'l Hosp., Inc. v. Mut. Hosp. Ins., Inc.*, 784 F.2d
    1325, 1336 (7th Cir. 1986); *Allis-Chalmers Mfg. Co. v. White
    Consol. Indus., Inc.*, 414 F.2d 506, 524 (3d Cir. 1969); *Natsource
    LLC v. GFI Group, Inc.*, 332 F. Supp. 2d 626, 636 (S.D.N.Y. 2004);
    *Cmty. Publishers, Inc. v. Donrey Corp.*, 892 F. Supp. 1146, 1153
    n.6 (W.D. Ark. 1995); *Drs. Steuer & Latham, P.A. v. Nat'l Med.
    Enters., Inc.*, 672 F. Supp. 1489, 1510 n.17 (D.S.C. 1987).

[^2]: *Verizon Commc'ns Inc. v. Law Offices of Curtis V. Trinko, LLP*,
    540 U.S. 398 (2004).

[^3]: *Weyerhaeuser Co. v. Ross-Simmons Harwood Lumber Co.*, No. 05-381
    (U.S. Nov. 28, 2005).

[^4]: *Standard Oil Co. v. United States*, 221 U.S. 1, 52 (1911).

[^5]: *See, e.g.*, Dennis W. Carlton & Jeffrey M. Perloff, [Modern
    Industrial Organization]{.smallcaps} 91 (4th ed. 2005).

[^6]: J.R. Hicks, *Annual Survey of Economic Theory: The Theory of
    Monopoly*, 3 [Econometrica]{.smallcaps} 1, 8 (1935).

[^7]: *Trinko*, 540 U.S. at 407.

[^8]: Joseph A. Schumpeter, [Capitalism, Socialism and
    Democracy]{.smallcaps} 90, 87 (Harper Perennial 1976) (1942).

[^9]: Richard A. Posner, *Vertical Restraints and Antitrust Policy*, 72
    [U. Chi. L. Rev.]{.smallcaps} 229, 229 (2005) (emphasis in
    original).

[^10]: Herbert Hovenkamp, *Exclusion and the Sherman Act*, 72 [U. Chi.
    L. Rev.]{.smallcaps} 147, 147-48 (2005).

[^11]: R.W. Grant, [Tom Smith and His Incredible Bread
    Machine]{.smallcaps} 32-37 (Competitive Enter. Inst. 1998) (1964).

[^12]: *See also, e.g.*, *United States v. Aluminum Co. of Am.*, 148
    F.2d 416, 430 (2d Cir. 1945) (L. Hand, J.) ("The successful
    competitor, having been urged to compete, must not be turned upon
    when he wins.").

[^13]: A. Douglas Melamed, *Exclusive Dealing Agreements and Other
    Exclusionary Conduct---Are There Unifying Principles?*, 73
    [Antitrust L.J.]{.smallcaps} 375, 377 (2006).

[^14]: *Brooke Group Ltd. v. Brown & Williamson Tobacco Corp.*, 509 U.S.
    209 (1993).

[^15]: 509 U.S. at 232.

[^16]: *Id.* at 231, 224.

[^17]: *Id.* at 223.

[^18]: *Id.*

[^19]: *Id.* at 223-24.

[^20]: 540 U.S. at 414, 415.

[^21]: 540 U.S. at 414.

[^22]: *Id.*

[^23]: *Id.* at 415 (quoting Phillip Areeda, *Essential Facilities: An
    Epithet in Need of Limiting Principles*, 58 [Antitrust
    L.J.]{.smallcaps} 841, 853 (1990)).

[^24]: *Confederated Tribes of Siletz Indians v. Weyerhaeuser Co.*, 411
    F.3d 1030 (9th Cir.), *petition for cert. filed*, 74 U.S.L.W. 3213
    (U.S. Sept. 23, 2005) (No. 05-381).

[^25]: 411 F.3d at 1040 n.30.

[^26]: Frank H. Easterbrook, *The Limits of Antitrust*, 63 [Tex. L.
    Rev.]{.smallcaps} 1, 5 (1984).

[^27]: Brief for the United States as Amicus Curiae, *3M v. LePage's
    Inc.*, No. 02-1865, at 8, 19 (S. Ct. filed May 28, 2004).

[^28]: *United States v. Grinnell Corp.*, 384 U.S. 563, 570-71 (1966).

[^29]: *See, e.g.*, *United States v. Microsoft Corp.*, 253 F.3d 34, 59
    (D.C. Cir. 2001) (Section 2 violated when "the anticompetitive harm"
    of a business practice "outweighs the procompetitive benefit"); III
    Phillip E. Areeda & Herbert Hovenkamp, [Antitrust Law]{.smallcaps}
    ¶ 651a (2d ed. 2002) (proposing that a business practice is
    exclusionary when it is "reasonably capable of . . . prolonging
    monopoly power" and "produce\[s\] harms disproportionate to the
    resulting benefits"); Richard A. Posner, [Antitrust Law]{.smallcaps}
    194-95 (2d ed. 2001) (proposing rebuttable presumption that conduct
    is exclusionary when "likely in the circumstances to exclude from
    the defendant's market an equally or more efficient competitor").

[^30]: Dennis W. Carlton, *A General Analysis of Exclusionary Conduct
    and Refusal to Deal---Why* Aspen *and* Kodak *Are Misguided*, 68
    [Antitrust L.J.]{.smallcaps} 659, 675 (2001).