Anticompetitive Exclusion: Raising Rivals' Costs to Achieve Power over Price

Claims of anticompetitive exclusion should be judged according to whether the challenged conduct places rival competitors at a cost disadvantage sufficient to allow the defendant firm to exercise monopoly power by increasing its price. The proper approach to a wide variety of exclusions is to follow a 2-step analysis to estimate the likelihood of anticompetitive effects. A review is given of the present state of antitrust law concerning exclusion claims, with an explanation of why that law currently is confused and how the proposed approach would unify and rationalize it. An attempt is made to show how courts and antitrust enforcers might develop a set of objective guidelines to carry out the proposed 2-step analysis. The analysis is compared with those of others. It would be erroneous to assume that rivals always can protect themselves against anticompetitive exclusion.