Wednesday, April 29, 2015
Exclusive or "Exclusive Enough"? Lessons on Exclusive Dealing Standards from McWane v. FTC
On April 15, 2015, the Eleventh Circuit issued its anticipated opinion in McWane v. FTC and affirmed the FTC’s decision that certain exclusive dealing practices of McWane, a manufacturer of ductile iron pipe fittings, were unlawful. The case started over 3 years ago with a seven count administrative complaint under Section 5 of the FTC Act. Ultimately, only the monopolization count survived. That count alleged that McWane abused its monopoly power in the market for domestically produced ductile iron pipe fittings by implementing a “full support” program which discouraged customers from switching business from McWane to its competitor, Star. As a result Star was unable to achieve significant scale in the domestic fittings market and won only limited market share.
Given that Star did enter and increase its market share during the relevant period, the case raises interesting questions about the standards for harm in exclusive dealing cases. How much foreclosure is sufficient? Should the government need to establish a minimum efficient scale to prove its case? Under what circumstances does winning against a less efficient competitor expose companies with high market share to litigation risks? Join our panel as we explore the implications McWane has for exclusive dealing practices as well as what the case reveals about current FTC enforcement strategy.
* Steven J. Cernak, Schiff Hardin LLP * Justin P. Hedge, Arnold & Porter LLP
* Joseph Baker, Federal Trade Commission * David A. Balto, Law Offices of David A. Balto * Richard M. Brunell, American Antitrust Institute * Mary T. Coleman, Compass Lexecon * Daniel A. Crane, University of Michigan Law School FREE: Antitrust Section Members, Government, Nonprofit Employees and Students $25.00: Other Non-Members
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