New Paper on the Anti-Coercion Foundations of Refusals to Deal
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A New Paper on Refusals to Deal
Competition Policy International published a new paper I authored on refusals to deal. Refusals to deal are simple. A dominant firm stops doing business with another or decides to do business only with another firm based on some specified condition. Refusals to deal frequently involve a firm losing access to a critical channel of commerce or resource.
When Congress enacted the landmark Sherman Act in 1890, its primary aim was to inhibit dominant corporations from unfairly crushing small businesses, destroying economic opportunity, and undermining democracy in the United States. Prohibitions on refusals to deal embody precisely the kind of conduct Congress intended to inhibit with the Sherman Act because such conduct is often just a pure exertion of a corporation’s raw power. In other words, the Sherman Act’s prohibition of refusals to deal operates as an anti-coercion mechanism, inhibiting companies from using their raw dominance to force dependent firms to comply with their unilateral demands.
Unfortunately, since 2004, the Supreme Court has attempted to suppress the viability of refusal to deal claims under the Sherman Act. Of particular importance is the erosion of the anti-coercion principles designed to protect firms from refusals to deal and losing access to a critical commercial channel or resource. In my new paper, I detail the anti-coercion principle embedded in refusals to deal and why it needs to be revived. The paper is linked here. Thanks for reading.
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