Exclusionary conduct

Ten Things: Sherman Act Section 2 – The Monopoly Man Cometh

When I went to law school way back when there were two topics I swore I had no interest in Tax law and Anti-Trust law.  I avoided those classes like a high school third-period ballroom dancing.  Ironically, as General Counsel, the two biggest pieces of litigation I have worked on were, of course, multiple tax law class actions and a mind-numbing, soul-sucking antitrust dispute.  Which meant, despite my previous oaths, I got a first-class education in both.  Of the two, by far the worst was the anti-trust dispute which involved multiple plaintiffs, the DOJ, and the hyper-focused attention of the CEO, President, and Board of Directors as this was truly a “bet the company” problem.  Not to mention that I did not have a day off (including holidays) for almost two years.

So, why do I bring up all this pain?  Because I wanted to share the most challenging part of the entire dispute – dealing with Section 2 of the Sherman Act.  I’ll get into the details below but will just note here that Section 2 is vast minefield of traps for the unwary and you can easily find your company mired in a litigation quagmire where every contract, every clause, every meeting or action, and every email or PowerPoint comes under scrutiny for alleged uncompetitive behavior all because your company is highly competitive and highly successful.  Sound like a nightmare?  It is.  Meaning, all in-house counsel should have a basic understanding of Section 2 (or the local law equivalent, e.g., EU Article 102 on abuse of a dominant position) so they can keep a sharp lookout for whether, under the right set of circumstances, company actions or plans could risk drawing anti-trust scrutiny or, far worse, an anti-trust lawsuit.  This edition of “Ten Things” sets out the basics of Section 2 and what you need to watch out for:

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