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William & Mary Law Review Online

Abstract

Congress enacted the Sherman Act in 1890 and prohibited, among other practices, monopolization. To prove monopolization, the government and other plaintiffs must show that a firm both possessed monopoly power and engaged in bad conduct. In interpreting the spare language of the statute, the courts have identified many practices that constitute monopolization, including below-cost pricing, refusals to deal with rivals, and tying. In general, however, they have failed to explain why these practices are unfair and restricted by law. Judges have instead applied labels such as "anticompetitive" without articulating normative foundations for their decisions. A close examination of the case law reveals that the monopolization doctrine embodies implicit notions of unfairness. Legal precedent limits businesses' abilities to use their monopoly power, financial privileges, or generally prohibited conduct to acquire or perpetuate a monopoly. With its expansive "unfair methods of competition" authority, the FTC can codify and strengthen existing norms on unfair conduct. The FTC should specifically restrict firms' abilities to use exclusive dealing and below-cost pricing and ban the use of generally prohibited practices as unfair methods of competition. By proscribing these forms of business rivalry, the FTC would encourage businesses to grow and succeed through the fair treatment of trading partners, development of new products, and investment in new plants, facilities, and technologies.

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