Exclusionary Conduct in Antitrust

Exclusionary Conduct Testimony Before the Antitrust Modernization Commission

Refusals to deal come in many different forms. Appropriate legal standards differ across these forms. A vertical refusal to deal arises when a dominant input supplier refuses to sell its input to downstream rivals. A complementary refusal to deal arises when the dominant supplier of one product sells that product to customers as part of a bundle but refuses to sell that product alone to a rival...

Unilateral Conduct Workbook Chapter 2: Analytical Framework for Evaluating Unilateral Exclusionary Conduct

Evaluating Appropriability Defenses for the Exclusionary Conduct of Dominant Firms in Innovative Industries

In response to antitrust cases challenging the exclusionary conduct of dominant firms, some dominant firms offer an “appropriability defense”: a claim that prohibiting the challenged conduct would harm innovation by lessening the dominant firm’s return to investment in research and development (R&D) and, in consequence, undermining that firm’s incentive to innovate. This paper explains that an ...

Exclusionary Contracts ∗

When do participants in a market have the incentive to enter into agreements that exclude potential entrants? This paper synthesizes, extends and illustrates the theory of exclusionary contracts. In a model of incumbent contracts with downstream buyers, a “Chicago benchmark”yields no incentive for exclusionary long term contracts. Departures from the benchmark in each of three directions yield ...

Exclusionary Discounts

We consider a two-period model with two sellers and one buyer in which the efficient outcome calls for the buyer to purchase one unit from each seller in each period. We show that when the buyer’s valuations between periods are linked by switching costs and at least one seller is financially constrained, there exist plausible conditions under which exclusion arises as the unique equilibrium out...