Sherman Act Section 2

Introduction

Section 2 of the Sherman Antitrust Act, 15 USC § 2, prohibits monopolization, attempted monopolization, and conspiracies to monopolize. Unlike Section 1, which targets concerted action, Section 2 addresses unilateral conduct by firms that possess or threaten to acquire monopoly power. The statute does not prohibit the mere possession of monopoly power acquired through superior skill, foresight, or industry; rather, it condemns the anticompetitive acquisition or maintenance of monopoly power through exclusionary conduct.

The Monopolization Offense

A Section 2 monopolization claim requires proof of two elements: (1) the possession of monopoly power in a relevant market, and (2) the willful acquisition or maintenance of that power through exclusionary conduct, as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident. The Supreme Court established this framework in United States v. Grinnell Corp. (1966).

Monopoly power is the power to control prices or exclude competition in a relevant market. Courts typically infer monopoly power from a firm’s market share, though the analysis considers other factors, including the durability of market share, barriers to entry, and the conduct of competitors. A market share of seventy percent or more is generally sufficient to establish a prima facie case of monopoly power, though lower shares may suffice when combined with other evidence of market power.

Exclusionary Conduct

The second element of monopolization requires exclusionary conduct —behavior that reasonably appears capable of making a significant contribution to creating or maintaining monopoly power. The Supreme Court in United States v. Microsoft Corp. (2001) held that anticompetitive conduct must harm the competitive process, not merely individual competitors. Conduct that excludes rivals on some basis other than efficiency is actionable, while conduct that reflects competition on the merits is not.

Exclusionary conduct takes many forms. Predatory pricing —selling below cost to drive out competitors—is actionable under Section 2, but the Supreme Court in Brooke Group v. Brown & Williamson Tobacco Corp. (1993) imposed stringent requirements: plaintiff must prove that the defendant priced below an appropriate measure of cost and that there is a dangerous probability of recoupment. Refusals to deal are generally lawful, but in Aspen Skiing Co. v. Aspen Highlands Skiing Corp. (1985), the Court found liability where a monopolist terminated a voluntary and profitable course of dealing.

The Microsoft Case

United States v. Microsoft Corp. (2001) is the leading modern monopolization case. The D.C. Circuit held that Microsoft unlawfully maintained its monopoly in the market for Intel-compatible PC operating systems through exclusionary conduct, including the bundling of Internet Explorer with Windows, restrictions on OEMs, and actions that discouraged developers from supporting competing platforms.

The court applied a framework that has become the standard for Section 2 analysis: the plaintiff must first show that the defendant’s conduct has anticompetitive effects, after which the defendant may offer procompetitive justifications. The plaintiff then must demonstrate that the anticompetitive harm outweighs the procompetitive benefits. The court rejected the government’s proposed remedy of breaking up Microsoft, instead imposing conduct remedies.

The Google Cases

The United States v. Google LLC (2023) cases represent the next generation of Section 2 litigation. In the search case, the D.C. District Court found that Google unlawfully maintained monopolies in general search services and general search text advertising through exclusive distribution agreements—paying Apple, Mozilla, and other partners for default placement. The court held that these agreements had anticompetitive effects by depriving rivals of the scale necessary to compete effectively in search.

The decision established important principles for digital markets, including that exclusive agreements may violate Section 2 even when they are partially exclusive, and that the analysis of monopoly power must account for the unique characteristics of zero-price markets and multi-sided platforms.

Attempted Monopolization

The offense of attempted monopolization requires proof of: (1) anticompetitive conduct, (2) specific intent to monopolize, and (3) a dangerous probability of success. Under Spectrum Sports v. McQuillan (1993), the plaintiff must define the relevant market and show that the defendant’s conduct created a dangerous probability of achieving monopoly power. Conduct that would be lawful for a monopolist may nevertheless support an attempt claim if it is accompanied by the requisite intent and dangerous probability.

Conclusion

Sherman Act Section 2 addresses the most serious antitrust concern: the acquisition and maintenance of monopoly power through exclusionary conduct. The distinction between lawful monopoly achieved through competition on the merits and unlawful monopolization through exclusionary conduct is central to Section 2 analysis. Recent enforcement actions against technology platforms have revitalized Section 2 litigation and raised new questions about the application of traditional frameworks to digital markets.