Antitrust Legal Issues 3

    The government is also trying the case on the grounds of leveraging, a rather disputed legal issue. Leveraging is the use of monopoly power in one market to gain advantage in another market. The government claims that Microsoft has repeatedly used its monopoly of the operating system market to gain unfair advantage in the software market.

    It is worth noting that this definition does not explicitly state that the offending firm's intention be to create a monopoly in this second market. Simply gaining an unfair advantage is sufficient to make this claim.

    Leveraging has been considered a violation of section 2 of the Sherman Act since US v. Griffith in 1984. Section 2 makes any person who monopolizes or attempts or conspires with others to attempt to monopolize guilty of a misdemeanor (this was later changed to a felony). In Berkey Photo, Inc. v. Eastman Kodak Co., the courts ruled that leveraging was also in violation of section 1 of the Sherman Act, which makes illegal any contract, conspiracy, or combination in restraint of trade, when the case involved bundling the product that has achieved monopoly concentration with the one that has not.

    The circuit courts are deeply divided over the issue of leveraging, however. Some have found that an attempt at monopolization of the second market is requisite in accusing a firm of a violation of this nature. Other decisions denied that this is even a self-sufficient antitrust violation, and that it can be used only to supplement some other offense.

Back    |    Next
    Index