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SG Amicus Brief in Trinko *Views are the personal views of the presenter only and are not necessarily those of his employer
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The Grant of Cert. In Trinko “Did the Court of Appeals err in reversing the District Court’s dismissal of respondent’s case?”
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Second Circuit Decision n Class action on behalf of consumers; motion to dismiss n The amended complaint may state a claim under the essential facilities doctrine n Plaintiff may also have a monopoly leveraging claim.
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Essential Facilities Doctrine Claim Essential facility: the local loop (1) control of the essential facility by a monopolist: The local loop is essential for competing in local phone service market. (2) a competitor’s inability practically or reasonably to duplicate the essential facility: economic and regulatory constraints (3) the denial of the use of the facility to a competitor: allegations re RBOC filling orders. (4) the feasibility of providing the facility: BA had no valid business reason and was intended to exclude competition
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Monopoly Leveraging n Defendant had monopoly power over the wholesale local access market n Defendant used that power to “gain a competitive advantage” in the retail local telephone service market. n Plaintiff was injured
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SG Amicus Brief in Trinko : Underlying Theme n To succeed on any Section 2 claim plaintiff must prove that the challenged conduct was “exclusionary or predatory” n The test: Plaintiff must prove that the challenged conduct makes no sense except as an effort to diminish competitoin. A “but for” test. n Note the traditional definition of “exclusionary,” e.g., Microsoft: Conduct having an anticompetitive effect, that is, it must harm the competitive process.
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SG Amicus Brief in Trinko : Essential Facilities Doctrine n Essential facilities doctrine is a lower court construct never adopted by the Supreme Court. n The essential facilities doctrine does not impose a non- discrimination obligation; the language relied upon by 2 nd Cir. came from remedial portion of Terminal Railroad, not the liability portion. n The challenged conduct made economic sense because while regulatory structure required RBOCs to charge competitors at TELRIC the antitrust laws do not require monopolists to sacrifice profits.
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SG Amicus Brief: Monopoly Leveraging n The 2 nd Circuits “gain competitive advantage” is the wrong standard – extending monopoly is the correct one. n Conduct makes economic sense because it was profitable strategy.
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