American University Law Review
The drafters of the Sherman Act originally designed Section 2 to impose
sanctions on all monopolies and attempts to monopolize, regardless whether the
firm had engaged in anticompetitive conduct. This conclusion emerges from the
first ever textualist analysis of the language in the statute, a form of interpretation
originally performed only by Justice Scalia but now increasingly used by the
Supreme Court, including in its recent Bostock decision.
Following Scalia’s methodology, this Article analyzes contemporaneous
dictionaries, legal treatises, and cases and demonstrates that when the Sherman
Act was passed, the word “monopolize” simply meant that someone had acquired
a monopoly. The term was not limited to monopolies acquired or preserved through
anticompetitive conduct. A textualist analysis accordingly suggests that Section 2
should be applied to impose liability and corrective remedies on all monopolies and
attempts to monopolize.
A textualist approach to statutory construction would not imply or create
unstated exceptions. Since Section 2 of the Sherman Act contains no explicit
exception for a monopoly acquired or preserved without proof of anticompetitive
conduct, none should be implied or created. Current case law requiring plaintiffs to
prove the corporation involved engaged in improper conduct should be overturned.
This Article also briefly analyzes the practical economic implications likely to
follow if the courts adopt a “no-fault” approach to monopolization law. This
analysis will demonstrate that the overall economic effects will be uncertain.
They will depend upon empirical issues whose net effect is speculative or
ambiguous. They nevertheless are likely to be beneficial on the whole, and this
provides some support for the no-fault position, and a fortiori demonstrate that
the Article’s textualist conclusions should be implemented.
Imposing sanctions on all extremely large monopolies could improve economic
welfare in many ways. This should increase innovation and international
competitiveness. It should prevent the allocative inefficiency effects of monopoly
pricing and the form of exploitation that arises when monopolies acquire wealth
from consumers. It would be likely to decrease the inefficiencies that result from
monopolies enjoying a “quiet life.” It should avoid the waste that can arise as a
firm struggles to attain and protect its monopoly, and some of the time and cost of
Section 2 litigation. It should improve privacy and decrease income inequality.
The new standard would admittedly also cause some costs and difficulties.
For example, imposing sanctions on all monopolies could sometimes send a
confusing or perverse signal to firms engaging in hard but fair competition,
especially as a firm’s market share neared the ambiguous level required for a
violation. No-fault liability could also enable competitors to file baseless
lawsuits. The transaction costs involved in imposing sanctions on monopolies
could be significant. It also could lead to difficult remedy issues in cases
involving natural and patent monopolies. We believe, however, that the benefits
of no-fault are likely to outweigh the costs.
Textualism has been used in more and more Supreme Court analyses in recent
years. Moreover, there recently have been many calls, from very different parts of
the political spectrum, for imposing sanctions on extremely large monopolies
without inquiring into whether the firm engaged in anticompetitive conduct.
This issue has not, however, been analyzed seriously either from a legal or an
economic perspective in roughly a half century.
The purpose of this Article is not to resolve all of the relevant questions. Its goal
is to re-kindle debate about the legal and economic issues involved in imposing
sanctions on all monopolies and attempts to monopolize under the Sherman Act
and also, a fortiori, under Section 5 of the FTC Act. And to demonstrate that its
textualism-derived conclusions constitute reasonable policy options.
Robert H. Lande & Richard O. Zerbe Jr.,
The Sherman Act is a No-Fault Monopolization Statute: A Textualist Demonstration,
American University Law Review
Available at: https://scholarworks.law.ubalt.edu/all_fac/1115