**Federal Trade Commission and Department of Justice Hearings**

**on Section 2 of the Sherman Act:**

**Single-Firm Conduct as Related to Competition**

**Session on International Issues**

**Prepared Remarks of**

**James F. Rill**[^1]

***September 12, 2006***

I.  **Introduction**

This roundtable focuses on the approaches of several jurisdictions to
dominant firm conduct and invites discussion on the ramifications of
various approaches for trans-border commerce. With the increasing volume
of international trade and growing number of multinational corporations,
the actions of an agency in one jurisdiction can have an impact across
the world.

Different enforcement agencies' analytical approaches coupled with
increased regulatory complexity have clouded the ability of firms
operating in global markets to plan business strategies with confidence
that an antitrust challenge will be avoided. The resulting uncertainty
can lead to excessive reticence to implement aggressive, efficient, and
often pro-competitive activities, and can damage consumer welfare.

The complexity inherent in the analysis of single-firm conduct
simultaneously endorses the need for caution and challenges the steady
approach to convergence that has been in large measure achieved, for
example, in the area of horizontal mergers.[^2]

Nevertheless, there is a need for enhanced certainty and, ideally, at
least, a framework for convergence in enforcement with regard to
dominant firm behavior. At a minimum, traditional and other mechanisms
could be employed to establish safe harbors for unilateral conduct. This
would enable firms to plan pro-competitive business strategy with
confidence, and promote consumer welfare. In the more complex and
unsettled areas outside the safe harbors, agencies should focus on
principles of certainty and transparency. Institutional mechanisms
already exist to promote these ends, and parallel informal cooperation
channels can augment them.

II. **Key Issues in The Application of Competition Policy to Unilateral
    Conduct of International Dimensions**

    A.  **Caution in Enforcement Is Warranted**

Even within a single jurisdiction, antitrust enforcement against
single-firm conduct presents a significant analytical challenge.
Enforcement activity that prohibits single-firm conduct has been
inconsistent in application even within individual jurisdictions. It has
created ambiguous results, leading, in some cases, to enforcement that
can be seen, *ex post facto*, as unwarranted. The challenge and risk of
over-enforcement in any single jurisdiction is exacerbated by the
multiplicity of agencies throughout the world that are undertaking to
address this conduct.

It is generally acknowledged that antitrust policy and enforcement
against unilateral conduct requires extreme caution. Complaints about
unilateral conduct often originate from competitors that seek
competition agencies' assistance in eliminating competitors or, more
often, in easing competitive, frequently efficiency promoting,
pressures, rather than preserving competition in the market as a whole.
As courts and enforcers continuously point out, antitrust policy is in
fact intended for the protection of competition, rather than of
individual competitors.[^3] However, when portrayed by competitors, the
true effect of unilateral conduct is often clouded. Conduct that is in
fact pro-competitive and beneficial to consumers is often attacked.
Excessive enforcement risks the error of chilling and even prohibiting
pro-competitive conduct. It is crucial, therefore, to ensure that
pro-competitive activity is not curtailed by over-enforcement of
antitrust rules. As BIAC recently noted,[^4] the implications of
misapplying the provisions on abusive conduct by dominant firms, in
particular by finding dominance where there is none, are anything but
trivial. By restricting or forcing firms to alter the way they license
their intellectual property rights, distribute their products, price
their products, or engage in other pro-competitive activities, enforcers
could discourage companies from entering into welfare-enhancing
activities and, more importantly, from undertaking innovative activities
in the first place.

The consequences of false-positive errors are more serious in innovation
markets, where over-enforcement may decrease incentives to develop new
products and technologies, with a concomitant reduction in consumer
welfare due to the non-introduction of valuable goods and technologies
for which there is consumer demand. Moreover, the nature of intellectual
property is such that curtailment of incentives by one jurisdiction can
adversely affect consumer welfare across many borders.

The dangers of over-enforcement intensify with the proliferation of
antitrust regimes across the world. Even apart from the "lowest common
denominator" problem noted by former Deputy Assistant Attorney General
Makan Delrahim,[^5] the very multiplicity of enforcement overlaid on
single-firm conduct can impede pro-competitive conduct, if for no other
reason than by undermining certainty as to the proper approach to its
conduct. Thus, in cases involving global markets and technology markets,
there is little doubt that any jurisdiction seeking to curtail
single-firm conduct risks impacting the welfare of consumers in other
countries and should proceed with extreme caution.

B.  **Illegal Conduct is Difficult to Identify**

Much of the pro-competitive conduct by a firm excludes rivals from some
share of the market, just as superior efficiency inherently forecloses
competitors.[^6] The challenge is to identify which exclusions result
from harm to the competitive process and which are a legitimate result
of more efficient production or other business acumen. This problem is
difficult with respect to unilateral conduct, which, unlike price or
output restriction among competitors, does not necessarily harm
consumers or the competitive process.

As a result of this complexity, the analysis of unilateral conduct is a
fact-driven rule-of-reason endeavor. Even within a single antitrust
jurisdiction, it is often not easy to predict or even determine whether
specific conduct will be found to violate antitrust laws, and the
challenge is far greater at the international level. This very
complexity and necessarily case-specific analysis makes substantive
convergence of analysis among jurisdictions especially difficult. What
can be achieved, nevertheless, is greater certainty about enforcement
methodology and some base-line agreement in the fundamental approach.

C.  **Transparency is Essential in Today's Multinational Business
    Climate**

The difficulty in achieving transparency and worldwide convergence
presents a challenge to today's multinational businesses. The decision
of one agency can and does affect the behavior of business entities in
other parts of the world. Businesses need certainty upon which they can
plan their strategy and behavior.[^7] A thriving industry inherently
benefits consumers, society as a whole, and the competitive process
itself since a vibrant business climate creates the competitive
pressures that stimulate efficiency and innovation by competitors, in a
constant effort to outdo their rivals by producing what consumers want
for the lowest price. As a result, there is a pressing and recognized
need for, at least, a trend toward convergence based upon application of
sound antitrust principles firmly grounded in economic learning.[^8]

In the absence of convergence, transparency is essential. A failure to
fully explain, and indeed justify, an enforcement action can be viewed
as selective action by an agency, reflecting the potential for
political, national or commercial bias. Enforcement activity must
possess every indicia of due process, even-handedness and
non-discrimination. The agency decision must be fully explained and
should be subject to appropriate judicial review. Investigative tools
should be in-line with typical procedures and should not place undue
burdens on the firm being investigated. Ultimately, each agency should
recognize that its investigation will impact the many firms that try to
discern the policy implications of the investigation, not just the firm
that is the subject of the investigation. Transparency is, therefore, a
fundamental requirement of enforcement of improper single-firm conduct.

III. **Absent Convergence, Safe Harbors for Dominant Firm Behavior
     Should be Established**

Adoption of safe harbors would contribute substantially to certainty and
remove, to some extent, the unwarranted frustration of pro-competitive
conduct. Such adoption can also spare businesses the enormous expense of
being forced to defend single-firm conduct where there is little
likelihood that such conduct could result in harm to consumers.[^9] The
inquiry should therefore concentrate first and foremost on the firm's
ability to maintain or enhance monopoly power because, by definition,
only where such ability is demonstrated may "abusive" effects take
place.

A.  **Though Incomplete and Arguably Flawed as a Comprehensive Tool,
    Structural Analysis Can Provide a Basis for Safe Harbor Analysis**

Antitrust monopoly power, or dominance, which is a crucial element in
any unilateral conduct case, is not measured in a vacuum. Rather, it is
evaluated within the context of a carefully defined product and
geographical market. While it is generally recognize that market
definition is only a proxy step toward the evaluation of market power,
the exercise can nonetheless provide a critical check on antitrust
enforcement in unilateral conduct cases. Antitrust enforcers and
practitioners recognize that market definition is a daunting task, which
involves unavoidable approximations and proxies for competition
analysis. Hence, the U.S. Supreme Court has acknowledged that there is
"some artificiality" in any boundaries, and that "such fuzziness" is
inherent in bounding any market.[^10]

As many industries are increasingly characterized by innovation and
shorter product lifecycles, assessing market definition and dominance is
becoming even more unreliable as a basis for thorough antitrust
analysis. In particular, with new and innovative products appearing
regularly, often taking away market share -- or entire markets -- from
older generation products, relying on existing historical data may
convey an inaccurate market picture.

Nonetheless, these paradigmatic shifts remain rare and market structure,
including market share, remains an informative fact as to the potential
for a firm to exercise unilateral market power, at least in the short
term. Although a large market share is insufficient, of itself, to
establish dominance, dominance should rarely be inferred on the basis of
conduct alone, without reference to market structure. For example,
should not necessarily imply market power absent evidence that a
corporation possesses monopoly power in the tying product. Preservation
of such a minimal degree of analysis of both market power and
exclusionary conduct is important because, again, it contributes to
certainty and does not facilitate analysis which characterizes a wide
range of potentially efficient conduct as *per se* unlawful. Also, as
will be explained, inquiry into defendants' position in the relevant
market provides a basis for a safe harbor zone.

1.  **Different National Standards in Defining Dominance**

The definition or identification of market dominance also differs
markedly across national boundaries. The differences have been widely
recognized and described and a detailed exposition is beyond the scope
of this session. Nevertheless, a few different approaches demonstrate
the divergent antitrust policy terrain.

-   The U.S. defines monopoly power as "the power to control prices or
    exclude competition" in a relevant market.[^11]

-   The European Commission (EC) views single dominance as a scenario in
    which an undertaking "has the power to behave to an appreciable
    extent independently of its competitors, its customers and
    ultimately of the consumers."[^12]

-   The Japanese Antimonopoly Act prohibits "private monopolization" by
    which a market player excludes or controls the business activities
    of other entrepreneurs, thereby causing, contrary to the public
    interest, a substantial restraint of competition in a particular
    field of trade.[^13] The Act also prohibits "unfair trade practices"
    defined as conduct which tends to impede competition but which falls
    short of the "substantial restraint of competition" criterion of
    Private Monopolization. Whether a firm is influential or not is one
    determining factor in that analysis.[^14]

-   In Mexico, Article 13 of the Federal Law of Economic Competition
    defines the criterion as whether the party can "unilaterally set the
    prices or restrict the supply in the relevant market without the
    competitive agents being able to act or to potentially counteract
    that power."[^15]

-   In Canada, the dominance element set out in Section 79 of the
    Competition Act focuses on whether "one or more persons
    substantially or completely control\[s\], throughout Canada or any
    area thereof, a class or species of business."[^16]

In addition to the analytical divergence among the various antitrust
jurisdictions, there are great differences in the evidentiary that
criteria agencies use to determine whether a firm satisfies the standard
of dominance. Most jurisdictions no longer accept static market share as
sole proxy for monopoly power.[^17] Instead, there is a growing
consensus among competition agencies that market share is merely the
starting point for defining or establishing dominance.[^18] In recent
years, the traditional market power inquiry underlying many
jurisdictions' analysis, to some extent, has moved away from historic
methods of market definition and market power analysis based largely on
market share data. Instead, they now consider much more searching
methodologies, such as cross-elasticities, diversion ratios, cost and
profitability data, and market share volatility.[^19] As a result,
instead of the old "market share" rule of thumb, the practical criteria
employed by agencies today greatly varies among the different agencies.

At the same time, the reduced role that market share continues to play
in the evaluation of dominance varies from one jurisdiction to another
in at least two respects, namely, the threshold at which market shares
will be considered as relevant evidence of monopoly power, and the
strength of the inference that can be drawn on the basis of a market
share which exceeds the threshold.

Examples of the first aspect, namely, the variance in the market share
thresholds that suggest dominance, include the following.

-   A U.S. court has found a ninety percent market share to be "enough
    to constitute a monopoly" but noted that "it is doubtful whether
    sixty or sixty-four percent would be enough; and certainly
    thirty-three percent is not."[^20]

-   Canadian courts have found market shares exceeding eighty percent to
    be prima facie indicators of market power,[^21] while market shares
    below fifty percent were not found to give rise to such a
    finding.[^22]

-   Under European Union law, market shares exceeding seventy percent
    raise a strong presumption of dominance, while market shares in the
    fifty to seventy percent range may in themselves raise a similar
    presumption under certain circumstances.[^23]

-   In Israel, a monopoly is statutorily defined as the vesting of more
    than half of the supply or purchase of goods or services within one
    entity.[^24]

-   Korean law presumes dominance where the market share is over fifty
    percent or the combined share of the top three competitors exceeds
    seventy-five percent.[^25]

-   Additional jurisdictions embrace different presumptions of market
    power above certain market share thresholds.[^26]

The second aspect, namely, the differences in the evidentiary weight
awarded to market share data, has been described by other
commentators.[^27] This disparity can raise significant issues for
transparency as well as consistency of enforcement.

The result of this theoretical and practical divergence is a serious
problem for antitrust practitioners and the enterprises they
advise.[^28] The absence of a single standard requires either a
multitude of approaches or a default to a single standardized approach.
A standardized approach has practical adverse effects. It often causes
companies to "play it safe" through abiding by the most restrictive
national antitrust rule all over the world. Such behavior, which is a
recognizable side effect of a single jurisdiction's over-enforcement,
reduces consumer welfare on an international level by chilling out
pro-competitive conduct. In addition, the cost of assessment and
compliance has accelerated with the proliferation of agencies and the
need to be familiar with diverse standards.

1.  **Market Share Thresholds Could Function as Safe Harbors**

While it is agreed that a high market share is not an adequate indicator
of monopoly power, low market shares can serve as a useful tool for, at
a minimum, vitiating any presumption of dominance. A realistic minimum
threshold would increase the much-needed certainty for the business
community. A threshold analysis of market power at an early stage can
also be useful for antitrust enforcers by helping to eliminate cases
where anticompetitive effects are highly unlikely, and thus save agency
time and focus budget and efforts on cases that pose significant
competitive threats.[^29]

Many competition agencies already employ such a safe harbor. More
specifically:

-   U.S. antitrust officials have expressed the view that they will not
    pursue allegations of unlawful monopolization where the market share
    of the subject company does not exceed fifty percent.[^30]

-   Under Japan's unfair trade practices rule, set out in Article 19 of
    its Antimonopoly Act, the acceptable thinking is that where a firm
    holds a low market share or is a newly entrant to the market, the
    conduct usually would not result in reducing the competitor's
    business opportunities or making it difficult for them to find
    alternative trading partners. Whether a firm is "influential in a
    market" is determined, among other things, by its market share, that
    is, whether it holds no less than ten percent of the market or its
    position is among the top three in the market.[^31]

-   The EC has expressed the view that "undertakings with market shares
    of no more than 25% are not likely to enjoy a (single) dominant
    position on the market concerned."[^32]

-   Canada's Competition Bureau has expressed the view that "\[f\]or the
    purpose of enforcing Section 79, the Bureau generally considers that
    a firm with a market share below 35% is not dominant."[^33]

Selection of the appropriate structural level for safe-harbor treatment
will undoubtedly require further dialog. The trend is toward higher
thresholds, approaching the standard applied in the U.S. Certainly, a
threshold as low as ten or twenty percent, will provide little comfort
in today's economic climate, especially when applied through a snap-shot
lens. Effective, useful, safe harbors must take account of realistic,
modern market considerations and not be unduly low out of excessive
caution.

A.  **Safe Harbors Should be Established for Specific Conduct**

Consideration should be accorded not only to the development of
structural safe harbors but to conduct-based safe harbors as well. Some
conduct is so patently pro-competitive that it should be categorically
declared legitimate, even if undertaken by a dominant firm. One obvious
case of such conduct is vigorous price competition. Since the lowering
of prices generally benefits consumers, such practice should never be
considered as predation as long as the set price remains above some
identified cost-based threshold.[^34] The chilling effect of any other
approach is significant and counter-productive to the goal of
competition enforcement.

Consumer welfare could also be promoted through appropriate safe harbors
applicable to some non-price conduct. The following conduct patterns
have been proposed as candidates in this context:

-   New product introduction;

-   Improved product quality;

-   Cost-reducing innovation;

-   Energetic market penetration; and

-   Successful research and development.[^35]

IV. **Cooperation is Essential for Promoting Consistency and
    Transparency**

    A.  **Robust Informal Cooperation**

In the event that certain conduct does not meet the criteria for safe
harbors, evaluation of that conduct should then be subject to a
fact-driven analysis, predicated on sound economic principles. Since
there are multiple criteria for the analysis, and the possible
combination of cases' factual circumstances are virtually infinite, the
results of any individual factual analysis become very hard to predict
*ex ante*.

Competition agencies should employ all available mechanisms for
addressing the problems of divergence through informal cooperation
mechanisms. Just as enforcement transparency is essential for
multinational business planning, transparency is also useful for
antitrust agencies allowing agencies to benefit from aggregate wisdom
and experience accumulated around the world.

B.  **Formal Cooperation Mechanisms**

    1.  **Case-by-Case Cooperation**

Antitrust agencies have made considerable progress in cooperation in
specific cases and investigations. This process can be expanded and
assisted by cooperation from parties through waivers of confidentiality
and similar undertakings. Some understanding by each agency of another's
enforcement perspective and enhanced, continuing dialog should
contribute to consistency and, it is hoped, results more consistent with
consumer welfare. Business can facilitate this cooperation through
various means, including the provision of appropriate waivers of
confidentiality.

2.  **OECD Roundtable Discussions**

The Organization for Economic Co-operation and Development (OECD)
roundtable discussions are a highly useful tool for exchanging views and
facilitating convergence. Recognizing the importance of international
cooperation on anticompetitive practices which bear a direct effect on
international trade, the OECD Council adopted in 1995 a recommendation
aimed at promoting cooperation between Member Countries on
anticompetitive practices.[^36] Under OECD auspices, the decade that
followed has seen significant practical contributions that were
developed as part of the coordination and cooperation by competition
agencies of OECD Member Countries together with business along with
competition agencies. The participation of business in OECD roundtable
discussions has been commended by the OECD Secretariat and national
authorities as adding substantial value to the debates.

One example of such practical contribution is the OECD Council's
recommendation on merger review of last year which seeks to promote
international coordination and cooperation in the area of merger
law.[^37] This recommendation is part of an ongoing broad effort in the
merger area that has brought about a number of additional significant
contributions.[^38] The hard core cartel area is another area which has
greatly benefited from the OECD's activism on international
convergence.[^39]

The OECD also conducts the Global Forum on Competition, which brings
together high-level competition officials from seventy competition
agencies around the world. With broad participation by both OECD members
and non-members, the program provides an excellent opportunity for
direct dialogue between national competition agencies. Such dialogue is
highly beneficial for debating complex competition issues, and
ultimately increasing international convergence. National agency papers
in connection with these OECD programs are increasingly providing
improved transparency. Further depth to these papers would be helpful. A
continued focus by the OECD on unilateral conduct will also benefit
convergence and inter-agency cooperation.

3.  **The International Competition Network (ICN)**

The ICN announced this summer that it is establishing a new Unilateral
Conduct Working Group, to be headed by Germany's Bundeskartellamt and
the U.S. Federal Trade Commission.[^40] The proposed mandate of the
group acknowledges the inconsistency in the way national agencies apply
unilateral conduct policy. Hence, its immediate objective is to "launch
a dialogue, share experience, and exchange views on general principles
and methodological issues regarding dominance/market power and abusive
practices."[^41] The new working group has already made further progress
by drafting a proposed work plan that was presented to the ICN Steering
Group for approval last week. This active new working group is indeed
promising to be highly beneficial in spearheading the efforts to promote
international cooperation and convergence on these issues.

V.  **Conclusion**

Businesses need as much certainty as possible in order to thrive.
Divergence among different national antitrust jurisdictions imposes a
great deal of uncertainty in today's global economy. Therefore,
transparency and gradual convergence is highly desirable for business
entities, and, in turn, benefits consumers. These remarks suggest some
areas whereby realization of these goals may be enhanced.

[^1]: ^^ James F. Rill is a Partner with Howrey LLP in Washington, DC
    and was Assistant Attorney General for Antitrust at the Department
    of Justice from 1989 -- 1992. Mr. Rill gratefully acknowledges the
    assistance of John Taladay, Partner, Damien Geradin, Of Counsel,
    Dina Kallay and Thomas Dillickrath, Associates, and Jane Antonio,
    Research Analyst, all of Howrey LLP in the preparation of these
    remarks.

[^2]: Detailed analysis of various approaches and recommendations have
    been covered in earlier roundtables and are beyond the scope of this
    paper.

[^3]: The notion that antitrust laws were enacted for the protection of
    competition, not competitors has been embraced in numerous U.S.
    Court cases, including *Copperweld Corp. v. Independence Tube
    Corp.*, 467 U.S. 752, 768 n.14 (1984); *Brunswick Corp. v. Pueblo
    Bowl-O-Mat, Inc.,* 429 U.S. 477, 488 (1977); *Brown Shoe Co. v.
    United States*, 370 U.S. 294, 320 (1962); *Tennessean Truckstop,
    Inc. v. NTS*, Inc., 875 F.2d 86, 88 (6^th^ Cir. 1989);**  ** *F. &
    M. Schaefer Corp. v. C. Schmidt & Sons, Inc.*, 597 F.2d 814,
    817 (2^nd^ Cir. 1979); *Mullis v. Arco Petroleum Corp.,* 502 F.2d
    290, 298 (7^th^ Cir. 1974); *Glen Holly Entm\'t, Inc. v. Tektronix
    Inc.*, 352 F.3d 367, 372 (9^th^ Cir. 2003); *Bright v. Moss
    Ambulance Service, Inc.*, 824 F.2d 819, 824 (10^th^ Cir.
    1987);** ***SmithKline Beecham Corp. v. Apotex Corp.*, 383 F. Supp.
    2d 686, 696 (E.D. Pa. 2004); *Ansell, Inc. v. Schmid Laboratories,
    Inc.*, 757 F. Supp. 467, 479  (D.N. J. 1991); and *Yangtze Optical
    Fibre v. Ganda, LLC*, 2006 U.S. Dist. LEXIS 38510, 2006-1 Trade Cas.
    (CCH) ¶ 75,322 (D.R. I. 2006).

    *See also*, *Cargill, Inc. v. Monfort of Colorado, Inc.*, 479 U.S.
    104, 109-10 (1986) for the related notion that it is "inimical to
    \[the antitrust\] laws to award damages for losses stemming from
    continued competition" (quoting *Brunswick Corp.*, 429 U.S. at 488).

    For a reflection of this notion by competition enforcers, *see,
    e.g.*, Neelie Kroes, *Preliminary Thoughts on Policy Review of
    Article 82*, Address Before the Fordham Corporate Law Institute
    (Sept. 23, 2005), *available at*
    http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/05/537&format=PDF&aged=1&language=EN&guiLanguage=en
    at 3 ("\[m\]y own philosophy on this is fairly simple. First, it is
    competition, and not competitors, that is to be protected").

[^4]: BIAC, Discussion Points Presented by the Business and Industry
    Advisory Committee (BIAC) to the OECD Working Party No. 3 on
    Cooperation and Enforcement, Roundtable Discussion on Proof of
    Dominance/Monopoly Power, ¶ I-3 (June 7, 2006).

[^5]: *See*, Makan Delrahim, *Facing The Challenge of Globalization:
    Coordination and Cooperation Between Antitrust Enforcement Agencies
    The U.S. and E.U.*, Address Before the ABA Administrative Law
    Section Fall Meeting (Oct. 22, 2004), *available at*
    http://www.usdoj.gov/atr/public/speeches/206429.pdf at 3 ("\[w\]hen
    half of the world\'s antitrust agencies are only ten years young or
    less, and there is still much discrepancy between agencies on
    antitrust enforcement principles, we believe that a forced path to
    uniformity would result in enforcement at the level of the lowest
    common denominator").

[^6]: *See also*, [Robert H. Bork, The Antitrust Paradox]{.smallcaps}
    137 (1993).

[^7]: *See also*, Laurence Popofsky's testimony in front of the
    Antitrust Modernization Commission's September 29, 2005 hearing on
    "Exclusionary Conduct: Refusals to Deal and Bundling and Loyalty
    Discounts" where he stated, "From a practitioner's point of view, we
    need *rules*. Not economic theory, but rules -- something akin to
    the per se rule under Section 1." Transcript of Public Hearing at
    12, Antitrust Modernization Commission (Sept. 29, 2005), *available
    at*
    http://www.amc.gov/commission_hearings/pdf/050929_Exclus_Conduct_Transcript_reform.pdf
    (emphasis added).

[^8]: *See also*, Randolph W. Tritell, *Regulatory Harmonization, 21^st^
    Century Challenges for Competition and Antitrust in the
    Trans-Atlantic Area*, *available at*
    http://ftc.gov/bc/international/docs/tritell_regharmonization.pdf
    (reviewing the reasons for a growing need for harmonization).

[^9]: *See*, USCIB, Statement of the United States Council for
    International Business, Submission to the Directorate-General for
    Competition on the Application of Article 82 of the Treaty to
    Exclusionary Abuses (Mar. 30, 2006), *available at*
    http://www.uscib.org/docs/Final_USCIB_Article82.pdf at 16.

[^10]: *See*, *United States v. Philadelphia Natl. Bank*, 374 U.S. 321,
    360 n.37 (1963); *United States v. Connecticut Nat'l Bank*, 418 U.S.
    656 (1974); and 2A [Phillip Areeda & Herbert Hovenkamp, Antitrust
    Law]{.smallcaps} ¶ 530d (2^nd^ ed. 1998-2006).

[^11]: *United States v. E. I. Du Pont de Nemours & Co*., 351 U.S. 377,
    391** **(1956); *United States v. Grinnell Corp*., 384 U.S. 563,
    571 (1966). *See also*, *AD/SAT v. Associated Press*, 181 F.3d 216,
    227 (2^nd^ Cir. 1999) (defining monopoly power as "the ability to
    price substantially above the competitive level and to persist in
    doing so for a significant period without erosion by new entry or
    expansion").

[^12]: DG Competition Discussion Paper on the Application of Article 82
    of the Treaty to Exclusionary Abuses (Dec. 2005), ¶ 28, *available
    at*
    http://ec.europa.eu/comm/competition/antitrust/others/discpaper2005.pdf,
    (citing Case 85/76, *Hoffmann-La Roche & Co. AG v. Commission*, 1979
    E.C.R. 461, ¶ 39).

[^13]: Act Concerning Prohibition of Private Monopolization and
    Maintenance of Fair Trade (Act No. 54 of 14 April 1947, rev. 2005) §
    3, *available at*
    http://www.jftc.go.jp/e-page/legislation/ama/amended_ama.pdf
    (hereinafter AMA). Significant jurisprudence has developed around
    the Act, such as *Hokkaido Shimbun* (Consent decision issued on Feb.
    28, 2000) and *the Intel Kabushiki Kaisha Ltd*. (Recommendation
    decision issued on Apr. 13, 2005), to name two recent examples.

[^14]: AMA, *id*., § 19.

[^15]: Federal Law of Economic Competition (1993), Art. 13, *available
    at*
    http://sp.cfc.gob.mx:8080/cfc01/Documentos/ing/Legislation/Federal%20Law/Index.htm
    (hereinafter FLEC). For an application of this standard, *see,
    e.g.*, Files AD-41-97 and RA-36-2001 *Teléfonos de México, SA de CV*
    (Telmex) which focused on Telmex's capacity to unilaterally set
    prices.

[^16]: Competition Act, R.S.C. 1985, c.19 (2nd Supp.), s.79. For a
    recent application of the standard, *see*, *Commissioner of
    Competition v. Canada Pipe Co., Ltd*., 2005 Comp. Trib. 3.

[^17]: *See*, Statement by the United States Before the OECD Competition
    Committee, Working Party No. 3 on Co-operation and Enforcement,
    Roundtable Discussion on Techniques and Evidentiary Issues in
    Proving Dominance/Monopoly Power, DAF/COMP/WP3/WD(2006)35 (May 29,
    2006), *available at*
    http://www.ftc.gov/bc/international/docs/DiscussionDominance-MonopolyPowerUnitedStates.pdf;
    and DG Competition Discussion Paper, *supra* note Error: Reference
    source not found, ¶¶ 23, 28-32 (demonstrating that market share
    alone is inconclusive of dominance).

[^18]: *See*, *e.g.*, Statement by the European Commission Before the
    OECD Competition Committee, Working Party No. 3 on Co-operation and
    Enforcement, Roundtable Discussion on Techniques and Evidentiary
    Issues in Proving Dominance/Monopoly Power, DAF/COMP/WP3/WD(2006)30
    (May 24, 2006), ¶32 ("\[q\]uantitative analysis should never
    determine on its own the existence of dominance but it can be very
    useful to lend additional credibility to a qualitative assessment").

    The Canadian position states that "\[m\]arket power is generally
    accepted to mean an ability to set prices above competitive levels
    for a considerable period....one must ordinarily look to indicators
    of market power such as market power and entry barriers. *The
    specific factors that need to be considered in evaluating control or
    market power will vary from case to case*." *Canada v. NutraSweet
    Co.*, \[1990\] 32 C.P.R. (3d), 47; \[1990\] C.C.T.D. No 17.
    (emphasis added).

    For the U.S. position, *see*, *American Council of Certified
    Podiatric & Surgeons v. American Bd. of Podiatric Surgery, Inc.*,
    185 F.3d 606, 623 (6^th^ Cir. 1999) ("market share is only a
    starting point for determining whether monopoly power exists, and
    the inference of monopoly power does not automatically follow from
    the possession of a commanding market share").

    Under the Mexican competition rules, a high market share is
    insufficient for concluding that an agent possesses substantial
    market power. Rather, market share is just one element among many
    that determine market power. FLEC, *supra* note Error: Reference
    source not found, Art. 13; and Code of Regulations to the Federal
    Law on Economic Competition, Art.12, *available at*
    http://www.cfc.gob.mx/DirResults.asp?txtDir=http://xeon2/cfc01/Documentos/ing/Legislation/Code%20of%20Regulations
    .

    In Japan, in determining whether a conduct constitutes private
    monopolization, the AMA provides no specific criteria on the market
    share of a company. Rather, the existence of market power is decided
    comprehensively, taking various circumstances into account. *See*,
    Statement by Japan Before the OECD Competition Committee, Working
    Party No. 3 on Co-operation and Enforcement, Roundtable Discussion
    on Techniques and Evidentiary Issues in Proving Dominance/Monopoly
    Power, DAF/COMP/WP3/WD(2006)26 (May 30, 2006), ¶14.

[^19]: *See*, BIAC, *supra* note Error: Reference source not found, ¶
    I-5.

[^20]: *United States v. Aluminum Co. of Am*., 148 F.2d 416, 424 (2^nd^
    Cir. 1945).

[^21]: *Canada v. Tele-Direct Publications, Inc*. \[1997\] C.C.T.D. No.
    8.

[^22]: *Canada v. Laidlaw Waste Systems Ltd.* (1991) 40 C.P.R. 3d 289,
    \[1992\] C.C.T.D. No. 1 (Comp. Trib.).

[^23]: *See*, DG Competition Discussion Paper, *supra* note [Error:
    Reference source not found,]{.smallcaps} ¶31 (citing Case 85/76,
    *Hoffmann-La Roche, supra* note Error: Reference source not found
    ¶41; Case C-62/86 *AKZO Chemie BV v. Commission* \[1991\] ECR
    I-3359, ¶60; and Case T-395/94 *Atlantic Container Line AB and
    others v. Commission*, \[2002\] ECR II-875 ¶328). *See also*,
    [Robert O'Donoghue & A. Jorge Padilla, The Law and Economics of
    Article 82 EC]{.smallcaps} 113 (Hart Pub. 2006).

[^24]: Restrictive Trade Practices Act, 5748-1988, § 26(A), *available
    at*
    http://www.antitrust.gov.il/NR/rdonlyres/9076F39E-6326-4EB3-8396-FC9191B1E4DA/0/Restrictive_Trade_Practices_Law_5748.doc.

[^25]: Monopoly Regulation and Fair Trade Act 1980, Art. 4.

[^26]: Examples include Austria (Kartellgesetz 1988), Estonia
    (Konkurentsisadus), Germany (Gesetz gegen Wettbewerbsbeschankungen),
    Latvia (Competition Law 2002), Lithuania (Law on Competition 1999),
    Poland (Competition Act 2000), Russia (Law on Competition 1991), and
    South Africa (Competition Act 1998).

[^27]: *See, e.g.*, Brian A. Facey & Dany H. Assaf, *Monopolization and
    Abuse of Dominance in Canada, The United States and the European
    Union: A Survey*, 70 [Antitrust L.J.]{.smallcaps} 513, 537-38 (2002)
    (suggesting that in the European Union market shares carry more
    evidentiary weight and create a stronger dominance presumption than
    in Canada).

[^28]: *See*, Gregory J. Werden, *Assigning Market Shares*, 70
    [Antitrust L.J]{.smallcaps}. 67 (2002) (describing the difficulties
    in assessing market shares); and Statement by the European
    Commission, *supra* note Error: Reference source not found, ¶¶ 35-40
    (discussing the many practical problems posed by the process of
    establishing relevant antitrust markets and market shares).

[^29]: *See*, Frank E. Easterbrook, *The Limits of Antitrust*, 63 [Tex.
    L. Rev]{.smallcaps}. 1, 14-16 (1984).

[^30]: *See*, Gerald F. Massoudi, *Key Issues Regarding China's
    Antimonopoly Legislation*, Address Before the International Seminar
    on Review of Antimonopoly Law (May 19, 2006), *available at*
    http://www.usdoj.gov/atr/public/speeches/217612.pdf.

[^31]: *See*, Statement by Japan, *supra* note Error: Reference source
    not found.

[^32]: *See*, DG Competition Discussion Paper, *supra* note [Error:
    Reference source not found,]{.smallcaps} ¶31 (citing Council
    Regulation (EC) No 139/2004 of 20 January 2004 on the control of
    concentrations between undertakings (The EC Merger Regulation), 2004
    O.J. (L 24) 1, Rec. 32 which reads, "Concentrations which, by reason
    of the limited market share of the undertakings concerned, are not
    liable to impede effective competition may be presumed to be
    compatible with the common market. Without prejudice to Articles 81
    and 82 of the Treaty, an indication to this effect exists, in
    particular, where the market share of the undertakings concerned
    does not exceed 25 % either in the common market or in a substantial
    part of it." )

[^33]: *See*, Canada Competition Bureau, *Report on the Chatham Gasoline
    Market* (Dec. 29, 1999), *available at*
    http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=1610&lg=e.
    *See also*, the Bureau's *Predatory Pricing Enforcement Guidelines*
    which state that "\[a\]t the outset of an examination the Director
    often uses as a rough proxy a market share of 35 percent, below
    which it is unlikely an alleged predator possesses market power."
    *Predatory Pricing Enforcement Guidelines*, *available at*
    http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=1746&lg=e#part2.

[^34]: *See*, *Brooke Group Ltd. v. Brown & Williamson Tobacco Corp.*,
    509 U.S. 209, 223 (1993) (citing *Atlantic Richfield Co. v. USA
    Petroleum Co*., 495 U.S. 328, 340 (1990) (\"Low prices benefit
    consumers regardless of how those prices are set, and so long as
    they are above predatory levels, they do not threaten competition. .
    . . We have adhered to this principle regardless of the type of
    antitrust claim involved.\")).

[^35]: *See*, 3 [Phillip Areeda & Herbert Hovenkamp, Antitrust
    Law]{.smallcaps} ¶ 651b (2^nd^ Ed. 1998-2006). *See also*, Werden,
    *supra* note Error: Reference source not found discussing types of
    conduct that could be considered presumably lawful.

[^36]: Revised Recommendation of the Council Concerning Co-operation
    Between Member Countries on Anticompetitive Practices Affecting
    International Trade, C(95)130/FINAL (Sept. 1995), *available at*
    http://www.oecd.org/dataoecd/60/42/21570317.pdf.

[^37]: Recommendation of the Council on Merger Review, C(2005)34 (Mar.
    23, 2005), *available at*
    http://webdomino1.oecd.org/horizontal/oecdacts.nsf/linkto/c(2005)34.

[^38]: *See, e.g.*, Guiding Principles For Merger Notification and
    Review Procedures, *available at*
    http://www.internationalcompetitionnetwork.org/icnnpguidingprin.htm;
    and Recommended Practices for Merger Notification and Review
    Procedures, *available at*
    http://www.internationalcompetitionnetwork.org/mnprecpractices.pdf.

[^39]: *See*, Best Practices for the Formal Exchange of Information
    Between Competition Authorities in Hard Core Cartel Investigations*,
    available at* http://www.oecd.org/dataoecd/1/33/35590548.pdf.

[^40]: *See*, Discussion Paper, *available at*
    http://www.internationalcompetitionnetwork.org/capetown2006/UCWGDiscussionPaper.pdf
    and

    Draft Mandate, *available at*
    http://www.internationalcompetitionnetwork.org/capetown2006/UnilateralConductWorkingGroupDraftMandate.pdf.

[^41]: Draft Mandate, *id*. at 1.