Can a Dominant Firm Refuse to Deal?

Antitrust Byte

Unilateral actions by a dominant firm can raise concerns under Section 2 of the Sherman Act, particularly if the action appears to have been taken for no other purpose but to maintain a dominant market position. But this does not (1) mean that a dominant firm is prohibited from competing aggressively in the marketplace or (2) otherwise impose upon a dominant firm an obligation to deal with its rivals. As the Department of Justice recently argued, citing to U.S. Supreme Court precedent, “even for a monopolist, ‘[p]art of competing like everyone else is the ability to make decisions about with whom and on what terms one will deal.’”

Generally speaking, a dominant provider can make a unilateral decision “not to deal,” provided such action is not “exclusionary.” Behavior is deemed to be exclusionary if it “(1) tends to impair the opportunities of rivals, [and] (2) either does not further competition on the merits or does so in an unnecessarily restrictive way.” Stated another way, “conduct is not exclusionary or predatory unless it would make no economic sense for the defendant but for its tendency to eliminate or lessen competition.”

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For additional information about the issues discussed above, or if you have any other antitrust concerns, please contact the Epstein Becker Green attorney who regularly handles your legal matters, or one of the authors of this Antitrust Byte:

E. John Steren
Member of the Firm
[email protected]

Patricia Wagner
Member of the Firm,
Chief Privacy Officer
[email protected]