One piece ata time: successive monopoly and tying in antitrust

mcchesney, fred s.;

As highlighted by the linkLine case, litigation alleging anticompetitive price
squeezes due to a defendant�s successive monopoly remains the recurring feature
in antitrust that it has been since Alcoa. Some decisions, notably then-Judge
Breyer�s Town of Concord opinion, treat the matter as one of economics. Others,
such as linkLine and similar appellate court decisions, resolve the matter on narrower
legal grounds. This article revisits the Concord opinion�s economics, correcting
small errors in Judge Breyer�s graphical analysis but reaffirming his principal
economic point that successive monopoly ordinarily is procompetitive and may
well benefit consumers. Decisions upholding price squeezes in a successive monopoly
on purely legal grounds are therefore economically correct. The article then
argues that the economics of successive monopoly offer an economically sound
extrication from the morass in which tying law currently wallows. The economic
differences between successive monopoly and tying are inconsequential. So the
law governing the two practices (section 2 of the Sherman Act for successive monopoly, section 1 of the Sherman Act and section 3 of the Clayton Act for tying)
should be reduced to a single set of standards. Parallels to the economics and law
of exclusive dealing are also noted as part of the case for legal unification.