Articles Posted in Monopoly and Dominance

Articles that discuss antitrust and competition issues involving monopolists, dominant companies, monopoly power, and dominance.

|
Apple-Siri-Google-Antitrust-300x198

The Gate to the Kingdom May Be Closing for Good: Apple Puts Google Inside Siri

Author: Luis Blanquez

On January 12, 2026, Apple and Google announced a multi-year deal—reported at roughly $1 billion a year—under which a custom Google Gemini model will run as the backend “brain” of the rebuilt Siri and the next generation of Apple Intelligence. Apple plans to unveil the new assistant at WWDC on June 8, 2026, and ship it with iOS 27 in September. Apple’s own on-device Foundation Models will handle simpler, privacy-sensitive tasks. Heavier queries will route to Gemini on Apple’s private cloud. Siri’s cognitive core will no longer be Apple’s. It will be Google’s.

Meanwhile, ChatGPT—the model Apple spent 18 months positioning as the future of iPhone AI, and the one still at the center of the xAI antitrust lawsuit pending in the Northern District of Texas—continues to sit where it has always sat: in a separate, opt-in, off-by-default layer that users have to turn on themselves. In iOS 27, Apple will expand that layer into an “Extensions” framework that lets users pick from Claude, Grok, Copilot, Perplexity, and a user-selectable Gemini chatbot app alongside ChatGPT.

On the surface, the Gemini deal looks like Apple conceding ground—admitting it cannot build a frontier AI model of its own and paying Google to fill the gap. It is not. Apple does not fear a better chatbot. It fears losing the user to one. By routing Siri’s cognition through a supplier Apple controls contractually, it keeps the interface, the invocation, the defaults, the billing, and the brand—everything that makes an operating system a platform—while outsourcing the only layer it never wanted to own: the AI model. It is classic Apple, but this time with Google as an ally instead of a threat.

Where The xAI Case Stands

Elon Musk’s X Corp. and xAI sued Apple and OpenAI on August 25, 2025, in the Northern District of Texas.

The theory of harm has two layers. First, ChatGPT’s integration into iOS, iPadOS, and macOS—announced in June 2024—delivers billions of iPhone-originated prompts to a single model. Second, the complaint alleges that Apple deprioritized rival chatbots in App Store rankings, making it harder for Grok and others to reach users even outside the system layer.

In late September 2025, Apple and OpenAI moved to dismiss. Apple argued the deal is “expressly not exclusive.” OpenAI called the suit part of a “lawfare” campaign. Judge Mark T. Pittman denied both motions on November 13, 2025, in a one-page order signaling the case is “more well-suited for adjudication through a motion(s) for summary judgment.” Discovery opened on October 10, 2025, and closes on May 22, 2026.

Two rulings tell us the real story.

The source-code ruling: Courts don’t want to become engineers, they just want evidence of platform foreclosure

On January 22, 2026, Magistrate Judge Hal R. Ray Jr. denied X’s motion to compel OpenAI to produce ChatGPT’s source code. X argued it needed the code to rebut any defense of lack of feasibility, to establish whether Apple could integrate Grok into the Apple iOS, and whether it would be feasible to integrate multiple AI products from various providers on the iPhone. The court disagreed on both relevance and proportionality.

On relevance, the order is blunt: “At this stage, it is unclear how the source code is relevant to whether Apple unlawfully excluded Grok from its products and conspired with the other defendants to create a monopoly.” On proportionality, the court noted that OpenAI had already produced API documentation and offered to stipulate that neither side would rely on proprietary source code. X refused the compromise. The court refused the production.

For a platform-exclusion case, that ruling is not a setback. It is a roadmap. Courts do not want plaintiffs dissecting competitor IP to infer what could have happened. They want direct evidence of platform misconduct—integration terms, routing logic, default settings, App Store treatment. That is where antitrust liability lives in a case like this. The court said so in plain terms, and future plaintiffs should take the hint.

The April 2026 motion to compel: Valuation and training data

X filed a second motion to compel on April 10, 2026, this one aimed squarely at OpenAI’s document production. The motion accuses OpenAI of having “persistently evaded its discovery obligations,” noting that OpenAI had produced 7,475 documents compared with X’s 32,116. The requested materials include valuation studies, financial projections through 2030, ChatGPT usage by country, and documents about OpenAI’s use of X data to train its models.

The valuation request is the one to watch. X tells the court that OpenAI’s valuation grew by more than $500 billion in the past year—from $300 billion at the end of March 2025. X argues the jump “does not make sense unless OpenAI and its investors understand that ChatGPT’s exclusive deal with Apple is cementing OpenAI’s dominance.” That is a causation theory built on investor behavior, not technology.

The training-data request matters for a different reason. OpenAI has defended the case in part by arguing that Grok’s foreclosure from iPhone-originated prompts is insubstantial because xAI has asymmetrical access to X data. X’s response is direct: if OpenAI also trains on X data, the asymmetry disappears. That question—who gets to learn from where—sits at the center of every theory of harm in generative AI.

Both motions, taken together, ask the court to analyze platform foreclosure through evidence: deal terms, integration architecture, valuation impact, data flows. None of it is specific to OpenAI nor depends on getting inside OpenAI’s code.

That same framework applies to Gemini.

Gemini Isn’t Apple’s Competitor. It’s Apple’s Supplier.

Apple’s decision to build Siri on Gemini at the backend, while offering third-party chatbots through Extensions on top, reshapes the competitive picture more than any filing in Texas has.

Apple did not retreat from AI. It relocated AI. Every layer a platform needs—distribution, defaults, billing, invocation, user interface, identity—remains Apple’s. When a user says, “Hey Siri” and Gemini answers, Apple delivers the answer. The supplier is invisible. Apple owns the user relationship.

That is the Google Search playbook applied one floor up in the stack. The existing Apple–Google deal to make Google the default search engine in Safari has existed for over a decade, with payments roughly reaching $18–$20 billion a year in the early 2020s. Google delivered the search results. Apple kept the browser, the UI, the defaults, and the customer. Nobody ever thought of Safari as “the Google browser.” That deal survived the U.S. v. Google antitrust trial not because it was invisible, but because it proved how much Apple gained by making a dominant rival pay for access instead of competing on equal terms.

The Gemini arrangement reuses the same design. At the foundational layer, Gemini is Siri’s cognitive backend—contractual, invisible, and not subject to user choice. At the visible layer, the iOS 27 Extensions framework lets users swap among ChatGPT, Claude, Grok, Perplexity, and a Gemini chatbot app for certain requests. Apple will point to that second layer as evidence of openness. But the first layer is where platform control actually lives. Whatever model a user picks through Extensions runs on top of an infrastructure Apple has already built around Gemini. Apple does not compete with Gemini. Apple neutralizes it by absorbing it. History doesn’t repeat itself, but it often rhymes.

Forget the App Store. This is Microsoft All Over Again

The App Store line of cases is a distraction here. The real analogue is the Microsoft browser and search monopolization litigation, both in the United States and the EU.

Continue reading →

|

Acquisition-Monopoly-Firetruck-300x170

Author: Aaron Gott

Seven U.S. cities have filed antitrust suits in five weeks against two manufacturers of “fire apparatus”—and the lawsuits are consolidating into a federal multidistrict litigation in the Eastern District of Wisconsin.

The case is about fire trucks. If you have ever been the parent of a five-year-old, you probably have heard about just how awesome fire trucks can be. But you probably don’t make fire trucks or use them in your business.

You should still take note of this litigation. Especially if you’re in private equity, at an acquisition-driven company, or serve markets involving specialized products or institutions like municipalities.

The defendants—REV Group and Oshkosh Corporation’s Pierce Manufacturing subsidiary, along with several entities connected to private equity investor American Industrial Partners—are accused of violating Sections 1 and 2 of the Sherman Act and Sections 3 and 7 of the Clayton Act. The theory is straightforward: through a series of acquisitions, two players came to dominate the fire apparatus market, and the alleged result is what antitrust lawyers call an “acquisition monopoly.”

This is not a new legal theory, but it is a legal theory that, just a few years ago, was unlikely to turn into a major MDL. A plaintiff’s burden on a monopolization claim under Section 2 is historically much more difficult to meet than a price-fixing claim under Section 1 because the latter is per se illegal, requiring no proof of anticompetitive effect, and face fewer doctrinal hurdles. So the antitrust class plaintiffs’ bar rarely brought them.

That’s changing, and acquisition-based monopolization claims could be a driving factor. The fire apparatus MDL is an example: just look at the pace at which top plaintiffs’ firms are filing cases, the involvement of municipalities as plaintiffs, and the rapid MDL consolidation. This could be a new era of sprawling antitrust blockbusters not centered on allegations of a price-fixing cartel.

Here is what you need to understand about acquisition monopolies.

What “Acquisition Monopoly” Actually Means

Section 2 of the Sherman Act prohibits monopolization—defined as (1) the possession of monopoly power in a relevant market, and (2) the willful acquisition or maintenance of that power, as distinguished from growth or development as a consequence of superior product, business acumen, or historical accident.

The word “willful” is where acquisitions get complicated. Courts have long recognized that a company can violate Section 2 not by outcompeting rivals, but by buying them. Where each acquisition is a deliberate step in a strategy to eliminate competition and entrench market dominance, the cumulative pattern can satisfy Section 2’s willfulness requirement even if any individual deal was commercially rational on its face.

The Clayton Act adds another layer. Section 7 prohibits any acquisition—of stock or assets—where the effect “may be substantially to lessen competition, or to tend to create a monopoly” in any line of commerce or any section of the country. Note the word “may.” Section 7 is forward-looking: it catches transactions at the point where competition might be substantially harmed, not only after the damage is done. When a series of acquisitions is alleged, plaintiffs can argue both that individual deals violated Section 7 as they occurred and that the pattern of acquisitions collectively violates Section 2.

That is the double-barrel structure: Clayton Act Section 7 targets the deals as they happened; Sherman Act Section 2 targets the market power that resulted. Both claims are in the fire apparatus complaints.

The Specialized Market Problem

Antitrust liability under Section 2 depends critically on how the relevant market is defined. Market concentration and power can more easily be established where product specifications are highly customized, procurement cycles are long, and the number of qualified suppliers is small by nature.

Fire apparatus is that kind of market. Municipal fire departments operate under precise technical specifications—apparatus must meet NFPA standards, comply with state fire codes, and satisfy local procurement requirements. Fire trucks are not commodity equipment. The design, engineering, and production timelines make this a market with high barriers to entry, long customer relationships, and limited competitive alternatives.

Plaintiffs in specialized-equipment cases have an easier time with market definition because the product’s own characteristics draw the boundary. When you make the only commercially viable product for a specific application—or one of two—that fact does much of the plaintiffs’ work and makes it harder for defendants to argue a broader market such that monopoly power disappears.

How Courts Evaluate Roll-Up Claims

Plaintiffs’ antitrust lawyers have learned how to structure acquisition-monopoly cases, and the template is worth understanding.

The theory typically runs like this: defendant or its PE sponsor conducted a buy-and-build strategy, acquiring companies A, B, C, and D over a period of years; each acquisition eliminated a meaningful competitor; post-acquisition, defendant raised prices, reduced product quality, or restricted output; and the cities or businesses that purchased the product paid more than they would have in a competitive market.

Courts do not require plaintiffs to prove that every individual acquisition was anticompetitive. The question is whether the acquisitions, viewed as a course of conduct, reflect a willful strategy to acquire monopoly power. Internal communications—board materials, deal memos, strategic plans—that discuss market consolidation, competitor elimination, or pricing power post-acquisition are among the most damaging documents defendants face in discovery.

Private equity creates a particular documentation problem here. PE sponsors routinely model acquisitions in terms of EBITDA multiples, synergies, and market positioning. Investor presentations may explicitly reference competitor acquisition as a strategy for pricing power. That framing, which is entirely normal in PE deal documents, can look incriminating in an antitrust complaint. The plaintiffs in fire apparatus cases almost certainly obtained public filings, investor presentations, and press releases in which the defendants’ market consolidation strategy was described in terms that plaintiffs’ counsel will characterize as an admission.

Private Plaintiffs, Treble Damages, and the Municipal Angle

What makes the fire apparatus MDL structurally significant is the identity of the plaintiffs: cities. Municipal governments purchase specialized equipment through formal procurement processes, maintain records of every competitive bid, and have institutional incentives to pursue antitrust damages aggressively. Unlike a private commercial buyer who might want to preserve a supplier relationship, a city has no such constraint. Seven cities have filed antitrust lawsuits in five weeks. Others almost certainly will.

Continue reading →

|

Microsoft-Antitrust-Picture-300x232

Authors: Pat Pascarella & Luke Hasskamp

Recent proceedings involving Apple Inc.—including the U.S. Department of Justice case and Epic Games v. Apple—together with developments in AI markets, suggest an evolving framework for platform-focused antitrust analysis. This article considers how those threads may fit together. 

I. The DOJ Has Done Substantial Groundwork

Begin with market power. In U.S. v. Apple, the district court accepted as plausible a U.S. smartphone market in which Apple holds roughly 65%—now closer to 70%—reinforced by barriers to entry, network effects, and switching costs.

The DOJ also presents an alleged pattern of exclusionary conduct: the repeated neutralization of technologies that reduce platform dependence, including middleware, super apps, cloud streaming, smartwatches, messaging, and digital wallets. According to the complaint, each time a product threatened to make device choice less consequential, Apple constrained or neutralized it. If this allegation is supportable, such a pattern could address concerns about improperly “punishing success.”

II. The Markets Apple Controls at 99 Percent

If a higher market share is needed, the more compelling market is not some smartphone submarket. Rather, it will be markets Apple controls at 99 percent: the iOS functionalities and apps themselves. While not every function is a separate product, some may well  be—particularly those Apple allegedly targets.

Epic v. Apple is instructive on this point, and not fatal. The court did not hold that iOS-tethered markets are inherently non-cognizable—only that Epic failed to establish that consumers lacked awareness of iOS restrictions and could not factor them into purchasing decisions. But those gaps seem addressable.

The full scope of any restraints—and their costs—is obscured in a dense web of contractual and technical restrictions. No reasonable consumer could anticipate the extent to which app review, API access, and distribution control could be wielded against rivals. Nor should antitrust liability turn on whether consumers anticipated unlawful conduct.

Even if consumers had advance knowledge of such restraints, a single-brand market is not foreclosed. Apple’s own counsel acknowledged in Epic that consumers entering the iOS ecosystem cannot predict downstream costs related to app distribution, in-app payments, or aftermarkets. If the costs of any restraints are unknowable at the time of purchase, foremarket competition cannot discipline aftermarket conduct. The remaining elements of a single-brand iOS functionality or app market also appear to be present, including allegations of intentional degradation of interoperability to maintain switching costs—without corresponding loss of share or margin.

III. CoStar, Exclusive Dealing, and the End User License Agreement

Some claims may not require pleading a single-brand market. For example, under the Ninth Circuit’s decision in CoStar v. CREXi, “substantial foreclosure” is sufficient to plead an exclusive dealing agreement.

The agreement? The EULA itself. While a web of contractual and technical restrictions might enable foreclosure, the enforceable agreement between Apple and the user is embodied in the EULA. In that sense, Apple may have supplied potential plaintiffs with the central instrument of its own potential liability.

IV. The EULA as a Negative Tie

The EULA may also provide a foundation for tying claims. Courts often resist tying theories in platform cases, frequently reasoning that coercion must be directed at consumers rather than suppliers. That argument, though contestable, is predictable.

A potential response may be that it is the EULA that effectively conditions use of the platform on the consumer’s agreement not to obtain competing products, services, or apps outside Apple’s approval.

V. Attempted Monopolization and Dangerous Probability of Success

Tying allegations also expand the analytical framework, though courts ultimately may analyze them as attempted monopolization. On the “dangerous probability of success,” a defendant such as Apple likely would invoke concerns about outdated leveraging theories. But this would not be a classic leveraging case.

Any company that demonstrates both the ability and the willingness to neutralize technologies or rivals that threaten its market position may struggle to characterize that conduct as competing on the merits. Such a pattern should reduce concerns about punishing a company simply for being successful. Where a company has demonstrated a pattern of exclusion and retains the ability to repeat it, the “dangerous probability” standard should be satisfied.

VI. Inextricably Intertwined—and Antitrust Standing

A direct monopolization claim targeting the U.S. smartphone market faces a threshold question: standing. Developers and rivals operating at the functionality level are neither customers nor competitors in the smartphone market.

Continue reading →

|

Author: Pat Pascarella

AI will weaponize antitrust. AI markets have high fixed costs, winner-take-all dynamics, platform leverage, bundling power, and data lock-in.  These dynamics predict concentration.  And market concentration is an accelerant for antitrust litigation—both private and government. We saw it with IBM, Microsoft, and the telecom wars.

Private actions will move faster than government enforcers—not because they are necessarily stronger on the merits, but because they are less constrained by politics and bandwidth. A well-timed complaint can slow a rival’s rollout, trigger regulatory scrutiny, and create settlement leverage.  When markets tip quickly, the losers litigate.

Continue reading →

|

Amazon-Germany-300x134

Author: Luis Blanquez

On 5 February 2026, Germany’s competition authority, the Bundeskartellamt, announced a landmark ruling prohibiting Amazon from continuing practices that influenced how independent sellers priced their products on the German Amazon Marketplace. The authority also ordered Amazon to disgorge €59 million in economic benefits that it determined were gained through these anticompetitive practices.

At the center of the ruling lies Amazon’s dual role in Germany’s online retail ecosystem. As in the United States, the company not only sells products through its own retail arm, Amazon Retail, but also operates the Amazon Marketplace, a platform where independent third‑party sellers list and sell goods directly to consumers. About 60% of all items sold on Amazon.de come from these independent sellers, who bear full responsibility for setting prices and managing the financial risks of their businesses.

The Bundeskartellamt concluded that Amazon used a variety of “price control mechanisms” to review whether sellers’ prices were “too high.” When Amazon’s systems flagged a price as unacceptable, the company responded by either fully removing the listing from the platform or excluding the offer from the Buy Box—the prominent purchasing option that strongly influences sales volume. These measures can severely limit a seller’s visibility and revenue.

According to the authority, this system created a significant competitive imbalance. President Andreas Mundt emphasized that Amazon directly competes with the very sellers who rely on its platform. When a dominant marketplace operator can restrict or manipulate competitor pricing—even indirectly through algorithmic controls—it risks shaping the entire price landscape according to its own commercial interests. Mundt warned that such interference could prevent sellers from covering their costs, potentially pushing them off the marketplace entirely.

The Bundeskartellamt made clear that it does not object to Amazon’s ambition to offer low prices to consumers. Instead, the issue lies in how Amazon has attempted to achieve that goal. Regulators argue that Amazon can provide competitive prices without directly constraining the pricing choices of independent sellers. To address the issue, the authority has restricted Amazon from using price control tools except under narrowly defined circumstances—particularly cases of excessive or exploitative pricing—and only in compliance with detailed requirements that the Bundeskartellamt has now established.

The regulator highlighted the implications of Amazon’s market position. Amazon accounts for roughly 60% of Germany’s online goods retail market, making it an undeniably influential digital gatekeeper. Because independent sellers depend heavily on Amazon’s infrastructure and visibility, any internal policy that affects pricing can have sweeping economic impact. The authority asserts that Amazon’s previous practices allowed it to act as both a competitor and an arbiter of acceptable pricing behaviors, creating a structural conflict of interest.

By limiting Amazon’s ability to use these mechanisms, the Bundeskartellamt aims to restore pricing freedom to third‑party sellers and safeguard the competitive process. The decision stresses the need to prevent dominant digital platforms from exploiting their market position by embedding competitive advantages into the algorithms and systems that govern visibility, listing status, and price acceptability. According to the authority, this type of intervention is crucial to ensuring that Amazon cannot extend its competitive power on the marketplace into the broader retail economy.

Continue reading →

|

Oligopoly-Competition-Antitrust-300x193

Author: Ruth Glaeser

Recent news highlights a growing focus on government antitrust enforcement cases against companies accused of monopolizing markets and abusing their power. But let’s consider another question: if a company lacks sufficient market power to qualify as a monopolist, but competes with only one or a handful of other companies, how does that affect consumer welfare?

American antitrust law seems to champion consumer choice untainted by anticompetitive practices. But it does not prohibit the market dynamic known as an oligopoly, which is a structure prevalent in numerous industries across the United States and the world. In an oligopoly, a small number of firms effectively control the quality, pricing, and supply of a particular market. This departure from perfect competition typically leads to some combination of higher prices and lower quality, and possibly less innovation and fewer consumer choices.

Consider the air-travel industry, where major players like Delta, American Airlines, United, and Southwest hold substantial influence over consumers. Similarly, when purchasing technology devices, most consumers find themselves choosing among a limited array of manufacturers, such as Apple, Samsung, and others. While no single entity monopolizes the market, collectively these firms exert significant control, raising concerns about the implications for consumer choice and pricing.

As the landscape of market power continues to evolve, understanding the dynamics of oligopolies becomes increasingly crucial for consumer welfare.

What is an Oligopoly?

An oligopoly is a market structure characterized by a small number of firms, usually fewer than five, that collectively account for a substantial share of the market. These firms are generally interdependent and the decisions of one firm often directly influence the behavior and profitability of the others. Their interdependence can lead to anticompetitive behaviors, including aggressive pricing to tacit collusion. These practices may harm  competition and consumers.

One of the largest threats to competition from oligopolistic behavior is conscious parallelism. Conscious parallelism occurs when firms in a competitive market make aligned decisions without direct communication or collusion. Instead, each firm observes the actions of its competitors, and reacts accordingly, often leading to similar pricing strategies, product offerings, or marketing tactics. Sometimes, there is one company, often the largest, that will start the merry-go-round, and smaller companies will follow the leader.  Importantly, conscious parallelism is not itself illegal under the antitrust laws, but its effects can mimic the anticompetitive results of monopolies.

There are several ways in which a market can become an oligopoly. The most common are high barriers to entering a market and the need for economies of scale. Many industries, such as the airline industry, require significant financial investment, which can deter new entrants. Relatedly, established firms often benefit from economies of scale, which allow them to produce at lower costs than new entrants, making it hard for smaller firms to compete on price. Sometimes companies may merge or acquire competitors to facilitate this, which reduces market competitors and increases a firm’s market share.

Moreover, it is common for government regulations to create or sustain oligopolies, such as in the utility industry, where governments may grant exclusive rights to certain firms to operate in specific regions, limiting competition, and controlling pricing. And government regulation itself tends to increase economies of scale, which tends to move markets from competitive toward oligopolistic. Indeed, if the federal government truly cared about increasing competition, it would take a long-hard look at excessive, unnecessary regulations that increase market-entry barriers.

Risk of Anticompetitive Behavior

An oligopoly presents a risk for several types of anticompetitive behavior:

  • High Potential for Price Fixing

Price fixing occurs when a small number of firms in the oligopoly agree to set prices at a certain level, rather than allowing competition to determine them. A notable example is the case of In re Domestic Drywall Antitrust Litigation, which involved seven defendant drywall manufacturers, four of which were responsible for approximately 70% of the market share. Plaintiffs alleged that these drywall manufacturers engaged in collusion to raise prices by 35%, announcing the increase to customers well in advance. This move came at a time when the industry was facing a surplus of product alongside a decline in demand. While the case was settled before reaching trial, the court’s findings suggested that the price hike was free from illegal collusion among Defendants.

  • High Potential for Conscious Parallelism

Conscious Parallelism poses a significant challenge to competition. This phenomenon occurs when firms coordinate their behavior without any explicit communication or agreement, often leading to artificially inflated prices. A prime example is Holiday Wholesale Grocery Co. v. Phillip Morris Inc, where Phillip Morris, a dominant player in the cigarette market, announced a substantial price reduction on its premium products. Its three main competitors quickly followed suit, controlling approximately 95% of the market.

Continue reading →

|

large-monopoly-bus-300x169

Author: Jarod Bona

Do you or your competitor have a monopoly in a particular market? If so, your conduct or their conduct might enter Sherman Act, Section 2 territory, which we call monopolization.

If you are in Europe or other jurisdictions outside of the United States, instead of monopoly, people might label the company with extreme market power as “dominant.”

Of course, it isn’t illegal itself to be a monopolist or dominant (and monopoly is profitable). But if you utilize your monopoly power or obtain or enhance your market power improperly, you might breach US, EU, or other antitrust and competition laws.

In the United States, Section 2 of the Sherman Act makes it illegal for anyone (person or entity) to “monopolize any part of the trade or commerce among the several states, or with foreign nations.” But monopoly, by itself, is not illegal. Nor is it illegal for a monopolist to engage in competition on the merits.

If you are interested in learning more about abuse of dominance in the EU, read this article.

In the United States, monopolists have more flexibility than in the EU, but they are still under significant pressure and could face lawsuits or government investigations at any time, even when they don’t intend to violate the antitrust laws. There can be a fine line between strong competition on the merits and exclusionary conduct by a monopolist.

Here are the elements of a claim for monopolization under Section 2 of the Sherman Act:

  • The possession of monopoly power in the relevant market.
  • The willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.

These two basic elements look simple, but you could write books about them.

The Possession of Monopoly Power in the Relevant Market

To determine whether an entity has monopoly power, courts and agencies usually first define the relevant market, then analyze whether the firm has “monopoly” power within that market.

But because the purpose of that analysis is to figure out whether certain conduct or an arrangement harms competition or has the potential to do so, evidence of the actual detrimental effects on competition might obviate the need for a full market analysis. If you want to learn more about this point, read FTC v. Indiana Federation of Dentists (and subsequent case law and commentary). You can show monopoly power directly.

Sometimes this element leads to difficult questions about the line between monopoly power in a relevant market and something slightly less than that. Other times, the monopoly-power element comes down to how the court will define the relevant market. A broader market definition may create a finding of no monopoly power, while a more narrow definition means the powerful company has monopoly power.

Continue reading →

|

Apple-Store-Antitrust-and-Competition-EU-and-US-300x225

Author: Luis Blanquez

Apple is currently feeling the heat from antitrust authorities all over the world. Probably more than ever. Below is an article we recently published in the Daily Journal discussing in some detail the last developments in the Epic Games saga, both in the EU and the US.

Epic Games Has Returned to the Apple Store. Will Apple Throw a Hail Mary?

If you are a developer in the Web3 space trying to access the Apple Store, you should also review this article:

Antitrust, Web3 and Blockchain Technology: A Quick Look into the Refusal to Deal Theory as Exclusionary Conduct

So, what’s on Apple’s plate in the antitrust world on both sides of the pond?

In the European Union, the European Commission has fined Apple over €1.8 billion for abusing its dominant position on the market for the distribution of music streaming apps to iPhone and iPad users (‘iOS users’) through its App Store. The Commission found that Apple applied restrictions on app developers preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the app. Such anti-steering provisions ban app developers from the following:

  • Informing iOS users within their apps about the prices of subscription offers available on the internet outside of the app.
  • Informing iOS users within their apps about the price differences between in-app subscriptions sold through Apple’s in-app purchase mechanism and those available elsewhere.
  • Including links in their apps leading iOS users to the app developer’s website on which alternative subscriptions can be bought. App developers were also prevented from contacting their own newly acquired users, for instance by email, to inform them about alternative pricing options after they set up an account.

At the same time, the European Commission has just opened a non-compliance investigation under the new Digital Markets Act about Apple’s rules on (i) steering in the App Store; (ii) its new fee structure for alternative app stores; and (iii) Apple’s compliance with user choice obligations––to easily uninstall any software applications on iOS, change default settings on iOS and prompt users with choice screens which must effectively and easily allow them to select an alternative default service.

Meanwhile, antitrust enforcement is also heating up for the Cupertino company in the United States.

Besides several private litigation actions, Epic Games recently filed a motion accusing Apple of violating an order issued last year under California law barring anti-steering rules in the App Store.

And just few days ago, the Justice Department, joined by 16 other state and district attorneys general, filed a civil antitrust lawsuit against Apple for monopolization or attempted monopolization of smartphone markets in violation of Section 2 of the Sherman Act. According to the complaint, Apple has monopoly power in the smartphone and performance smartphones markets, and it uses its control over the iPhone to engage in a broad, sustained, and illegal course of conduct. The complaint alleges that Apple’s anticompetitive course of conduct has taken several forms, many of which continue to evolve today, including:

  • Blocking Innovative Super Apps.Apple has disrupted the growth of apps with broad functionality that would make it easier for consumers to switch between competing smartphone platforms.
  • Suppressing Mobile Cloud Streaming Services. Apple has blocked the development of cloud-streaming apps and services that would allow consumers to enjoy high-quality video games and other cloud-based applications without having to pay for expensive smartphone hardware.
  • Excluding Cross-Platform Messaging Apps. Apple has made the quality of cross-platform messaging worse, less innovative, and less secure for users so that its customers have to keep buying iPhones.
  • Diminishing the Functionality of Non-Apple Smartwatches. Apple has limited the functionality of third-party smartwatches so that users who purchase the Apple Watch face substantial out-of-pocket costs if they do not keep buying iPhones.
  • Limiting Third Party Digital Wallets. Apple has prevented third-party apps from offering tap-to-pay functionality, inhibiting the creation of cross-platform third-party digital wallets.

The complaint also alleges that Apple’s conduct extends beyond these examples, affecting web browsers, video communication, news subscriptions, entertainment, automotive services, advertising, location services, and more.

Continue reading →

|

NBA-and-Rival-Basketball-League-Antitrust-200x300

Authors: Luke Hasskamp & Molly Donovan

NBA action is FAN-TASTIC! Unless, of course, the action is one brought by the Department of Justice in a different kind of court. But that may be exactly where the NBA finds itself: the DOJ is reportedly investigating the professional basketball association for alleged antitrust violations. The NBA’s alleged anticompetitive conduct targeted Big3, a competitive basketball league founded by Ice Cube and entertainment executive Jeff Kwatinetz (with Clyde Drexler serving as commissioner!). That conduct included allegedly pressuring team owners, current NBA players, and advertisers and partner television networks not to do business with Big3.

Big3 is an aptly named 12-team, 3-on-3 league mostly comprised of retired NBA players. Teams play an eight-week season, followed by a two-week, four-team playoff, all during the NBA’s off-season. In 2023, the Big3’s regular season was held once a week in Chicago, Dallas, Brooklyn, Memphis, Miami, Boston, Charlotte, and Detroit, and the finals were held in London, England.

We’ve previously written about antitrust laws in the sports arena, including the infamous antitrust exemption in professional baseball. But baseball is an anomaly in that regard, as all other professional sports in the United States are subject to federal antitrust laws. (Professional football, baseball, basketball, and hockey are statutorily exempted from antitrust laws for negotiating television broadcast rights. See 15 U.S.C. § 1291.) Thus, antitrust liability is fair game for the NBA.

And, as this story broke, another recent antitrust case jumped to mind: that involving the PGA Tour and LIV Golf, when the PGA Tour faced antitrust scrutiny for its decision to suspend players who played for a would-be competitor league. The NBA dispute has many parallels to the PGA Tour case, though with some notable differences too, even though most details are not public.

To consider the legal nuts and bolts a bit, let’s look at what a Section 1 and Section 2 claim against the NBA might look like.

Section 1 of the Sherman Act – Unlawful Agreements

Federal antitrust laws (Section 1 of the Sherman Act) make it unlawful for two or more actors to enter agreements (conspiracies) to restrain trade or competition in the market. Classic examples include price fixing and group boycotts.

Here, the leading legal theory may be the group boycott. Under that theory, the NBA would have entered into one or more agreements with other entities to thwart Big3’s emergence and growth in the market.

One of the improper agreements reported here is between the NBA and the owners of each of its 30 teams, with the NBA allegedly instructing owners to not invest in the fledgling competitor. (An agreement between a sports league and its individual teams can implicate Section 1 of the Sherman Act, as was the theory in the recently-settled litigation against MLB involving the contraction of minor league teams.) The reports also suggest that the NBA may have persuaded sponsors and other business partners to agree to avoid doing business with Big3.

Section 2 of the Sherman Act – Monopolization 

Federal antitrust laws also make it illegal for a monopolist to preserve its dominant market position through anticompetitive conduct. And this section of the Sherman Act does not require collusion with another party—a single actor can incur liability.

Here, the NBA sure looks like a monopoly (or monopsony). It’s the dominant actor in the professional basketball market in the United States, with revenues exceeding $10 billion per year. (While we generally assume that the relevant geographic market is the United States, even if we were to consider the entire world, the NBA may still be a monopolist.) In professional basketball, there is no rival to the NBA. If you are an elite basketball player in the United States, the NBA is pretty much the only place to play (even if you include the Big3).

But the NBA’s status as a monopoly is not unlawful on its own. It’s fine for a business to emerge as a dominant market player through lawful means, such as through “a superior product, business acumen, or historic accident.” United States v. Grinnell Corp., 384 U.S. 563, 570­71 (1966).

Instead, to implicate Section 2 of the Sherman Act, the NBA must have engaged in some “exclusionary” or “anticompetitive” conduct to protect its monopoly and harm competition—that is something other than superior product, business acumen, or historic accident. Examples of exclusionary conduct include tying, exclusive dealing, predatory pricing, defrauding regulators or consumers, or engaging in coercive conduct, such as threatening customers with retaliation if they choose to do business with the would-be competitor in order to stifle the competitor’s growth in the market.

Continue reading →

|

Antitrust-for-Kids-300x143

Author:  Molly Donovan

At Argo Elementary, a group of kids gathers daily at lunch to buy and sell candy. The trading activity is a longtime tradition at Argo and it’s taken very seriously—more like a competitive sport than a pastime.

Candy trading doesn’t end once a 5th grader graduates from Argo. It continues across town at Chicago Middle School—but instead of lunch, candy trading happens there at the close of each school day. (The middle school had banned lunchtime trading due to several disputes that grew out of hand.)

Now here’s where it gets complicated, and nobody knows why it works this way, but the average lunchtime price at Argo determines the starting price for trades later in the day at Chicago.

For example: the average selling price for a candy bar on Monday, lunch at Argo is $2.50. Monday after-school prices at Chicago also will start at $2.50.

There are rules about what kind of candy can be traded—so that one trade can be easily compared to another (candied apples-to-candied apples) for purposes of determining who’s “winning.”

And sometimes kids—particularly the older ones at Chicago—place bets on what will happen on a particular trading day in the future, e.g., I bet prices will reach $3 or I bet no more than 50 candy bars will get sold this Friday.

That’s it by way of background. Here’s our story.

Arthur D. Midland (“ADM”) is 9. He is the link between Argo and Chicago. Each day, ADM leaves Argo Elementary when school lets out, walks to Chicago Middle, announces the “start-of-trade” Chicago price based on the lunchtime Argo price, and Chicago trading begins. (ADM’s mother allows this because ADM’s older brother (Midas) also trades at Chicago—so the two boys can watch each other.)

At the start of the school year, ADM contrived a very clever scheme. He bet Midas that, on Halloween, Chicago prices would be very low—as low as $1. Midas said, “No way! September prices are already at $2.50. If anything, prices will increase as kids go candy crazy in October. I’ll take that bet.”

So, for every candy bar sold at Chicago on Halloween for $1 or less, Midas would owe ADM $1. And for every candy bar sold at Chicago for more than $1, ADM would owe Midas $1.

With that bet front of mind, ADM became the primary candy seller at Argo, and as Halloween neared, he flooded Argo with candy and sold it intentionally at very low prices—50 cents for a Snickers! (ADM had the requisite inventory because he was an avid trick-or-treater and had saved all his Halloween candy from years past.)

Due to ADM’s scheme, Argo prices got so low that some kids packed up their candy and went home—refusing to trade there at all.

Well, Halloween finally came and, as you can imagine, ADM made a killing on the bet—100 candy bars were sold at Chicago on Halloween at less than $1, forcing Midas to pay ADM his entire savings. This more than compensated ADM for whatever losses he incurred for under-selling at Argo.

Once Midas realized ADM’s trick, he was furious. Didn’t ADM cheat? Midas assumed—as did all candy traders—that bets derived from candy sales would be based on real—not artificial—market forces.

Did ADM get away with it?

So far, no.

My Muse: For now, plaintiff Midwest Renewable Energy has survived a motion to dismiss its Section 2 monopolization claim against Archer Daniels Midland.

The claim is based on allegations of predatory pricing—basically that the defendant’s prices were below an appropriate measure of its costs and that the low prices drove competitors from the market allowing the defendant to recoup its losses. (For more on predatory pricing, read here.)

In the ADM case, Midwest alleges that ADM manipulated ethanol-trading prices at the Argo Terminal in Illinois to create “substantial gains” on short positions ADM held on ethanol futures and options contracts traded on the Chicago Mercantile Exchange. Because the Argo prices determined the value of the derivatives contracts, by flooding Argo with ethanol that ADM sold at too-low prices, ADM allegedly was able to win big on the derivatives exchange—recouping whatever losses it incurred on the underlying asset.

On its motion to dismiss, ADM argued that Midwest had not sufficiently alleged that ethanol producers had exited the market due to ADM’s low prices or that ADM subsequently recouped its losses in the ethanol market. (ADM classed these arguments as going to antitrust injury.)

The Court agreed that Midwest was required to allege both that rivals exited the market and that recoupment was ongoing or imminent, but the court ruled Midwest’s allegations sufficient to do so.

Specifically, Midwest had alleged that 12 ethanol producers had either stopped or decreased ethanol production—which is enough at the motion to dismiss phase. The court said whether that alleged “handful” of plant closures had a discernible effect on consumers is a fact-intensive analysis not susceptible to resolution on the pleadings.

Continue reading →

Contact Information
Dallas
100 Crescent Ct #700 - 3425
Dallas, TX 75201
Phone: 469-296-7716
Detroit
28175 Haggerty Rd
Novi, MI 48377
Phone: 248-994-2221
Minneapolis
331 2nd Avenue S. #420
Minneapolis, MN 55401
Phone: 612-284-5001
New York
16 Madison Ave 9th Floor
New York, NY 10010
Phone: 212-634-6861
San Diego
4275 Executive Square
UNIT 200
La Jolla, CA 92037
Phone: 858-964-4589

ATTORNEY ADVERTISING

Please do not include any confidential or sensitive information in a contact form, text message, or voicemail. The contact form sends information by non-encrypted email, which is not secure. Submitting a contact form, sending a text message, making a phone call, or leaving a voicemail does not create an attorney-client relationship.

Copyright © 2016 – 2026, Bona Law PC
JUSTIA Law Firm Blog Design