The Dead Hand of Cellophane and the Federal Google and Facebook Antitrust Cases: Market Delineation Will Be Crucial

Abstract

The U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) monopolization cases against Google and Facebook, respectively, represent the most important federal nonmerger antitrust initiatives since (at least) the 1990s. As in any monopolization case, market delineation will be a central feature of both cases—as it was in the du Pont Cellophane case of sixty-five years ago. Without a delineated market, how can one determine whether a company has engaged in monopolization? Unfortunately, there is currently no accepted market delineation paradigm that can help the courts address this issue for monopolization cases. And this void generally cannot be filled by the market delineation paradigm that is embedded in the DOJ-FTC “Horizontal Merger Guidelines”: although this paradigm has had almost forty years of usage and is now well established and well accepted for merger analysis, this paradigm generally has no applicability for market delineation in monopolization cases. This article expands on this argument and shows the potential difficulties that are likely to arise in this area of market delineation and the consequent problems for both cases. This article also points the way toward a paradigm that offers a sensible approach to dealing with these difficulties.