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30 Mich. Tech. L. Rev. 1 (2023-2024)

handle is hein.journals/mttlr30 and id is 1 raw text is: GATEKEEPER COMPETITION POLICY Herbert Hovenkamp* INTRODUCTION Antitrust policy in the United States has always had special rules for dominant firms. As Justice Scalia once observed: Where a defendant maintains substantial market power, his activities are examined through a special lens: Behavior that might otherwise not be of concern to the antitrust laws-or that might even be viewed as procompetitive-can take on exclusionary connotations when practiced by a monopolist.2 Most practices other than naked horizontal agreements contain a market power requirement. For serious dominant firms - those with, say, 60% or more of a market - unilateral conduct is often subjected to scrutiny that is not applied to nondominant firms. This includes pricing, exclusive distribution, mergers, and sometimes even refusal to deal. In recent decades the Supreme Court has trimmed back on the special obligations that antitrust law imposes on dominant firms, and has gone too far.3 Competition policy toward dominant firms needs to become more aggressive, but without taking its eye from the ball. The principal concern remains the harmful use of market power. Most of the contraction in antitrust policy toward dominant firms has come from antitrust cases in traditional offline markets. The only Supreme Court decision addressing dominant firm antitrust liability on a digital network was Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko.4 The Court paid nearly no attention to the fact that the refusal to deal at issue was occurring on a digital network. One result is that lower court decisions since Trinko have followed along, treating digital networks in largely the same way they treat ordinary commodities.5 Repairing the antitrust law of dominant firms would require stronger duty-to-deal rules, particularly on networks, more aggressive rules governing exclusionary pricing, shoring up the ailing FRAND system for sharing patented technology,6 and more interventionist l*James G. Dinan University Professor, Univ. of Pennsylvania Carey Law School and the Wharton School. Thank you to Erik Hovenkamp for reading a draft. 2 Eastman Kodak Co. v. Image Tech. Svces., Inc., 504 U.S. 451, 488 (1992) (Scalia, J., dissenting), citing 3 PHILLIP AREEDA & DONALD TURNER, ANTITRUST LAW ¶ 813 (1978). s See Herbert Hovenkamp, Monopolizing Digital Commerce, 64 WM. & MARY L. REV. 1677 (2023), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3963245. 4 Verizon Communications, Inv. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004). 5 E.g., New York v. Meta Platforms, Inc., 66 F.4th 288 (D.C. Cir. 2023); Epic Games, Inc. v. Apple, Inc., 559 F.Supp.3d 898 (N.D.Cal. 2021), aff'd in substantialpart, 67 F.4th 946 (9th Cir. 2023); FTC v. Qualcomm, Inc., 969 F.3d 974 (9th Cir. 2020). 6 Herbert Hovenkamp, FRAND andAntitrust, 105 CORN. L. REV. 1683 (2020). 1

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