CELS/USC Virtual Antitrust Law Workshop Series: 'Justifying Monopolies'

Speaker: Professor John Newman (Memphis University Law School) 

Abstract: In spring 2025, Meta and the Federal Trade Commission squared off in a landmark monopolization trial. The FTC contended that Meta’s acquisition of WhatsApp several years earlier had entrenched Meta’s power over personal social networking. Meta responded that the acquisition was nonetheless legal because Meta had improved WhatsApp’s mobile-messaging service—a different product in a different market. In fall 2024, Epic Games (makers of the popular Fortnite video game) faced an appeal by Google. Epic sought to preserve a favourable jury verdict holding Google liable for illegally monopolizing the Android app distribution market.

Google urged reversal on the grounds that, even if it had monopolized Android app distribution, Google’s conduct had helped it better compete against Apple to sell smartphone operating systems—again, a different product in a different market. And in spring 2024, the U.S. Department of Justice and a bipartisan coalition of states faced Google in another monopolization trial. The enforcers sought to prove that Google had suppressed competition in general online search services. Google responded with several purported justifications, among them that its conduct had yielded offsetting benefits in the “related”—but different—markets for internet browsers and smart devices.
 
This argument—that out-of-market effects can justify otherwise-illegal monopolization—has become commonplace in high stakes antitrust litigation. And it is not confined to Big Tech firms or digital markets. The NCAA, for example, has sought to justify suppressing competition in the relevant market for student–athletes’ labour by pointing to supposed benefits for viewers of televised sporting events. Antitrust case law and commentary generally agree on the basic structure of analysis for Sherman Act monopolization cases. If a plaintiff can show that the defendant engaged in exclusionary conduct that created, maintained, or increased its monopoly power in a relevant market, then the onus shifts to the defendant. 

Widespread agreement also exists as to whether plaintiffs can carry their initial burden by proving that harmful effects occurred outside the relevant market: they cannot.  Defendants, for their part, can avoid liability by rebutting the plaintiff’s evidence or offering a salutary explanation, or “procompetitive justification” in modern antitrust parlance.  It may seem a natural corollary to constrain those justifications to intramarket effects—if plaintiffs cannot carry their initial burden via out-of-market effects, one would naturally think that defendants cannot carry their responsive burden in that way. And, as this Article explains, courts largely agreed for decades.

Nonetheless, recent judicial opinions in high-profile cases, including FTC v. Meta and United States v. Google, have toyed with opening the floodgates to this type of argument. Defendant-friendly amicus briefs and scholarship have urged a full embrace of justifications based on out-of-market (or “cross-market”) effects, offering a variety economics-based arguments in favour of this position.

This talk/paper discusses these and other issues in more detail. 
 

To register your interest for this event please contact Professor Oke Odudu (oo201@cam.ac.uk).