By Timothy Snyder & James Moore (Axinn Veltrop & Harkrider)
In the last year, various leaders at the Federal Trade Commission and the Antitrust Division of the Department of Justice have held out Section 2 of the Sherman Act as a vehicle for targeting acquisitions involving nascent competitors—including consummated mergers—that raise potential antitrust concerns. Three propositions, in particular, have invited controversy: (1) claims under Section 2 challenging the acquisition of a nascent competitor by a monopolist (or would-be monopolist) present a lower bar than Section 7 with respect to proving competitive effects and causation; (2) evidence of intent may be used as a proxy for probable harm; and (3) Section 2 may aid enforcers in challenging serial acquisitions—of targets with low market shares or start-ups outside of the acquirer’s primary market—on a course-of-conduct or “monopoly broth” theory.
These three points merit careful discussion. In May 2020, the American Bar Association Section of Antitrust Law (“ABA”) hosted an important panel, entitled A Lesser Hurdle? Exploring Section 2 as Applied to Consummated Mergers, to discuss competing views on this topic. In a similar spirit, this paper summarizes the key arguments on the topic to date, drawing on both the ABA panel discussion and recent scholarship. Rather than attempt to resolve the debate here, we capture the key points on both sides of each controversy to serve as a departure point for future discussion.