SG Amicus Brief in Trinko

*Views are the personal views of the presenter only and are not necessarily those of his employer

The Grant of Cert. In Trinko

“Did the Court of Appeals err in reversing the District Court’s dismissal of respondent’s case?”

Second Circuit Decision

Class action on behalf of consumers; motion to dismiss

The amended complaint may state a claim under the essential facilities doctrine

Plaintiff may also have a monopoly leveraging claim.

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

Monopoly Leveraging Defendant had monopoly power over the

wholesale local access market Defendant used that power to “gain a competitive

advantage” in the retail local telephone service market.

Plaintiff was injured

SG Amicus Brief in Trinko: Underlying Theme

To succeed on any Section 2 claim plaintiff must prove that the challenged conduct was “exclusionary or predatory”

The test: Plaintiff must prove that the challenged conduct makes no sense except as an effort to diminish competitoin. A “but for” test.

Note the traditional definition of “exclusionary,” e.g., Microsoft: Conduct having an anticompetitive effect, that is, it must harm the competitive process.

SG Amicus Brief in Trinko: Essential Facilities Doctrine

Essential facilities doctrine is a lower court construct never adopted by the Supreme Court.

The essential facilities doctrine does not impose a non-discrimination obligation; the language relied upon by 2nd Cir. came from remedial portion of Terminal Railroad, not the liability portion.

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.

SG Amicus Brief: Monopoly Leveraging

The 2nd Circuits “gain competitive advantage” is the wrong standard – extending monopoly is the correct one.

Conduct makes economic sense because it was profitable strategy.