Monday, October 20, 2008
Posted by D. Daniel Sokol
William Kolasky of Wilmer Hale articulates his thoughts on The Justice Department’s Section 2 Report: The Widening Schism on Pennsylvania Ave. Bill is a very thoughtful practitioner and I encourage you to read this work.
ABSTRACT: The Justice Department's Section 2 report and the Federal Trade Commission's sharp reaction leave practitioners in the perplexing situation where there seems to be strong disagreement between our two federal antitrust enforcement agencies over what standards should apply to single-firm conduct under Section 2 of the Sherman Act. This not only makes counseling more difficult than ever, but it also severely undermines the ability of our U.S. antitrust enforcers to play a role in shaping global antitrust policy toward single-firm conduct, an area in which many of us have long observed we already have a wide divergence between the United States and European courts.
I think the primary result will be one that was suggested by Chairman Kovacic in his separate statement—more discussion, and unfortunately little resolution. In the interest of trying to move that discussion forward and perhaps even heal the schism, I have a few overarching observations to share.
In my view, the Report, overall, is quite well done. It discusses what everyone acknowledges are very difficult issues in a well-informed and careful manner, and the approaches it proposes to take to the particular types of conduct it discusses (price predation, tying, bundled and loyalty discounts, refusals to deal, and exclusive dealing) seem generally sound in the sense of identifying the right issues to be examined in individual cases.
Where the Report veers off course—and where the comments from the majority of the FTC commissioners have the most persuasive force—is in the general standards it proposes for exclusionary conduct.