Monopolization Under the Sherman Act

Section 2 of the Sherman Act, 15 U.S.C.S. § 2, prohibits monopolies and attempts or conspiracies to monopolize. The Act provides for prison terms and fines in actions brought by the U.S. Department Justice and for injunctions and damages in civil actions brought by the federal government, states and private parties.

Section 2 of the Sherman Act is violated through willful acquisition or maintenance of monopoly power if there is an effect on interstate or foreign commerce.

Monopoly power is considered to be the power to control prices or to exclude competition. In deciding on the existence of such power, the courts will first determine whether there are relevant product and geographic markets in which such power can be measured. Such a determination will depend upon consideration of products or services that may be available to substitute for the allegedly monopolized products or services. The relevant market share of the alleged monopolist may become determinative as the share approaches total market domination.

Evidence

Whether the monopolist has willfully acquired or maintained the monopoly is an issue that may be determined by evidence of such activities as predatory or below cost pricing, illogical refusals to deal, or systemic abuses of market regulation devices such as engaging in abusive or sham legal proceedings.

Section 2 of the Sherman Act also prohibits attempted monopolization. Attempted monopolization may be shown when the market share of the defendant is large enough to indicate a probability that monopolization will occur and when intent of the defendant to seek a monopoly is shown. There is a line between intent to harm a competitor, which may be insufficient to show attempted monopolization, and intent to harm competition, which may be considered sufficient to show attempted monopolization if the defendant is also shown to be dangerously close to achieving monopolization.

A conspiracy to monopolize also is a violation of Section 2 of the Sherman Act. Such a conspiracy is shown by an agreement, an overt act in furtherance of that agreement, an effect on commerce, and a specific intent to monopolize.