'Why can't a woman be more like a man?': American and Australian approaches to exclusionary conduct

Melbourne University Law Review, Dec, 2007 by George A. Hay, Rhonda L. Smith

There are many economic issues with respect to bundled discounts. For the courts, the primary challenge is to see which, if any, of the traditional exclusion pigeonholes to put bundled discounts into, each with its own criteria for illegality. Should it be thought of as de facto predatory pricing on the second product (although the second product, even with the discount, is being sold above cost); as de facto exclusive dealing or exclusive purchasing, since the customer is economically compelled to take all of its needs of the second product from the monopolist; as a de facto tying arrangement since, to get the best price on the first product, the customer must buy the second product from the monopolist as well; or none of the above? Moreover, things get messier when the number of products involved increases and the discount formula becomes more complex, such as increasing discounts as the percentage of the second product bought from the monopolist increases. Courts are still working out how to handle such bundled discounts. (87) Obviously, the problem arises in part because there are different legal standards for conduct with substantially the same economic effect depending on which, if any, pigeonhole the court decides to use.

D Dirty Tricks

This is to some extent a catch-all category designed to pick up anything not included under the preceding headings. But more analytically, the conduct discussed under the heading 'dirty tricks' would involve conduct that is unilateral, so it is clearly not covered under [section] 1 of the Sherman Act (whereas, for example, exclusive dealing or tying might be), and would not normally be regarded as leveraging or otherwise misusing existing monopoly power. It brings to mind French J's hypothetical of the firm that hires an arsonist to burn down its competitor's factory and his Honour's opinion that such conduct would not contravene s 46 of the TPA because it would not constitute misuse of market power. (88) In the US, this would often involve business torts of the sort normally covered by state law, such as false advertising, tortious interference with contractual relations and misappropriation of trade secrets. Another category of conduct (that may or may not be covered under state law) involves so-called 'sham litigation'--litigation initiated not because the defendant necessarily expects to succeed in the courtroom, but because, regardless of the eventual outcome, the defendant hopes to drown its competitor in litigation so that the costs drive it from the marketplace or otherwise impede its ability to compete effectively. (89)

There are two aspects of US antitrust law that make these Kinds of claims feasible. First, US law permits claims based on 'attempt[s] to monopolize' (90) so that the plaintiff does not have to establish that the defendant actually has monopoly power at the time of the alleged anti-competitive conduct so long as there is a 'dangerous probability' that monopoly will be achieved as a result of the conduct. (91) Secondly, US law prohibits monopolisation or attempted monopolisation by any anti-competitive means, (92) and therefore does not require that the conduct constitute a '[m]isuse of market power'. (93) In any event, claims of monopolisation or attempted monopolisation based primarily on dirty tricks are relatively rare. (94)