Title

Extending Predation Analysis to Monopolist's Bundled Discounts under Section 2: An Economic, Legal, and Comparative Perspective

Abstract

In LePage’s v. 3M, the Third Circuit decided the first case at the federal appellate court level that dealt with the subject of bundled discounts by a monopolist under Section 2 of the Sherman Act in the period following the U.S. Supreme Court’s decision in Brooke Group Ltd. v. Brown & Williamson Tobacco Corporation. Prior to the decision in Brooke Group, the Third Circuit had only once before addressed this topic in Smithkline Corp. v. Eli Lilly and Company. Smithkline is only significant because it nearly suggested that any bundled discount, regardless of whether above or below cost, was anti-competitive. At the time of Smithkline in 1978, the Third Circuit had therefore not even considered monopolist bundled discounts with regard to products in the same relevant market as constituting a very serious legal issue. Following Brooke Group, however, practitioners believed that this state of affairs had changed. It is only well in the aftermath of Brooke Group, following the LePage’s Inc. v. 3M decision, that this issue has become the subject of vigorous debate. This Article explores how the Third Circuit should have decided in Lepage’s and provides an answer to what should be the proper U.S. jurisprudence with regard to this issue in light of Brooke Group and U.S. economic theory. This Article then proceeds to question this ideal U.S. jurisprudence by providing an EC comparative perspective. In doing so, this Article tries not to laud one standard over the other, but to precisely understand the philosophies, advantages, and disadvantages that underlie each system beyond the veil of law and economics.

Disciplines

Administrative Law | Antitrust and Trade Regulation | Commercial Law | Comparative and Foreign Law | Economics | International Law | Law and Economics

Date of this Version

December 2005