OPINION OF THE COURT
VERIZON COMMUNICATIONS INC. V. LAW OFFICESOF CURTIS V. TRINKO,
LLP
540 U. S. ____ (2004)
SUPREME COURT OF THE UNITED STATES
NO. 02-682
VERIZON COMMUNICATIONS INC., PETITIONER
v.
LAW OFFICES OF CURTIS V. TRINKO, LLP
on writ of certiorari to the united states court of
appeals for the second circuit
[January 13, 2004]
Justice Scalia delivered the
opinion of the Court.
The Telecommunications Act of
1996, Pub. L. 104–104, 110 Stat. 56, imposes certain duties upon
incumbent local telephone companies in order to facilitate market
entry by competitors, and establishes a complex regime for
monitoring and enforcement. In this case we consider whether a
complaint alleging breach of the incumbent’s duty under the 1996
Act to share its network with competitors states a claim under §2
of the Sherman Act, 26 Stat. 209.
I
Petitioner Verizon Communications
Inc. is the incumbent local exchange carrier (LEC) serving New York
State. Before the 1996 Act, Verizon,[
Footnote 1] like other incumbent LECs, enjoyed an
exclusive franchise within its local service area. The 1996 Act
sought to “uproo[t]” the incumbent LECs’ monopoly and to introduce
competition in its place.
Verizon Communications Inc. v.
FCC, 535 U.
S. 467, 488 (2002). Central to the scheme of the Act is the
incumbent LEC’s obligation under 47 U. S. C. §251(c) to share
its network with competitors, see
AT&T Corp. v.
Iowa Utilities Bd., 525 U. S. 366, 371
(1999), including provision of access to individual elements of the
network on an “unbundled” basis. §251(c)(3). New entrants,
so-called competitive LECs, resell these unbundled network elements
(UNEs), recombined with each other or with elements belonging to
the LECs.
Verizon, like other incumbent
LECs, has taken two significant steps within the Act’s framework in
the direction of increased competition. First, Verizon has signed
interconnection agreements with rivals such as AT&T, as it is
obliged to do under §252, detailing the terms on which it will make
its network elements available. (Because Verizon and AT&T could
not agree upon terms, the open issues were subjected to compulsory
arbitration under §§252(b) and (c).) In 1997, the state regulator,
New York’s Public Service Commission (PSC), approved Verizon’s
interconnection agreement with AT&T.
Second, Verizon has taken advantage of the
opportunity provided by the 1996 Act for incumbent LECs to enter
the long-distance market (from which they had long been excluded).
That required Verizon to satisfy, among other things, a 14-item
checklist of statutory requirements, which includes compliance with
the Act’s network-sharing duties. §§271(d)(3)(A) and (c)(2)(B).
Checklist item two, for example, includes “nondiscriminatory access
to network elements in accordance with the requirements” of
§251(c)(3). §271(c)(2)(B)(ii). Whereas the state regulator approves
an interconnection agreement, for long-distance approval the
incumbent LEC applies to the Federal Communications Commission
(FCC). In December 1999, the FCC approved Verizon’s §271
application for New York.
Part of Verizon’s UNE obligation under
§251(c)(3) is the provision of access to operations support systems
(OSS), a set of systems used by incumbent LECs to provide services
to customers and ensure quality. Verizon’s interconnection
agreement and long-distance authorization each specified the
mechanics by which its OSS obligation would be met. As relevant
here, a competitive LEC sends orders for service through an
electronic interface with Verizon’s ordering system, and as Verizon
completes certain steps in filling the order, it sends confirmation
back through the same interface. Without OSS access a rival cannot
fill its customers’ orders.
In late 1999, competitive LECs complained to
regulators that many orders were going unfilled, in violation of
Verizon’s obligation to provide access to OSS functions. The PSC
and FCC opened parallel investigations, which led to a series of
orders by the PSC and a consent decree with the FCC.[
Footnote 2] Under the FCC consent decree,
Verizon undertook to make a “voluntary contribution” to the U. S.
Treasury in the amount of $3 million, 15 FCC Rcd. 5415, 5421, ¶ ;16
(2000); under the PSC orders, Verizon incurred liability to the
competitive LECs in the amount of $10 million. Under the consent
decree and orders, Verizon was subjected to new performance
measurements and new reporting requirements to the FCC and PSC,
with additional penalties for continued noncompliance. In June
2000, the FCC terminated the consent decree. Enforcement Bureau
Announces that Bell Atlan- tic Has Satisfied Consent Decree
Regarding Elec- tronic Ordering Systems in New York (June 20,
2000), http://www.fcc.gov/eb/News_Releases/bellatlet.html (all
Internet materials as visited Dec. 12, 2003, and available in the
Clerk of Court’s case file). The next month the PSC relieved
Verizon of the heightened reporting requirement. Order Addressing
OSS Issues,
MCI Worldcom, Inc. v.
Bell Atlantic-New
York, Nos. 00–C–0008, 00–C–0009, 99–C–0949, 2000 WL 1531916
(N. Y. PSC, July 27, 2000).
Respondent Law Offices of Curtis V. Trinko,
LLP, a New York City law firm, was a local telephone service
customer of AT&T. The day after Verizon entered its consent
decree with the FCC, respondent filed a complaint in the District
Court for the Southern District of New York, on behalf of itself
and a class of similarly situated customers. See App. 12–33. The
complaint, as later amended,
id., at 34–50, alleged that
Verizon had filled rivals’ orders on a discriminatory basis as part
of an anticompetitive scheme to discourage customers from becoming
or remaining customers of competitive LECs, thus impeding the
competitive LECs’ ability to enter and compete in the market for
local telephone service. See,
e.g., id., at
34–35, 46–47, ¶ ;¶ ;1, 2, 52, 54. According to the complaint,
Verizon “has filled orders of [competitive LEC] customers after
filling those for its own local phone service, has failed to fill
in a timely manner, or not at all, a substantial number of orders
for [competitive LEC] customers … , and has systematically
failed to inform [competitive LECs] of the status of their
customers’ orders.”
Id., at 39, ¶ ;21. The complaint set
forth a single example of the alleged “failure to provide adequate
access to [competitive LECs],” namely the OSS failure that resulted
in the FCC consent decree and PSC orders.
Id., at 40, ¶
;22. It asserted that the result of Verizon’s improper “behavior
with respect to providing access to its local loop” was to “deter
potential customers [of rivals] from switching.”
Id., at
47, ¶ ;57, 35, ¶ ;2. The complaint sought damages and injunctive
relief for violation of §2 of the Sherman Act, 15 U. S. C. §2,
pursuant to the remedy provisions of §§4 and 16 of the Clayton Act,
38 Stat. 731, as amended, 15 U. S. C. §§15, 26. The complaint
also alleged violations of the 1996 Act, §202(a) of the
Communications Act of 1934, 48 Stat. 1064, as amended, 47 U.
S. C. §151
et seq., and state law.
The District Court dismissed the complaint in
its entirety. As to the antitrust portion, it concluded that
respondent’s allegations of deficient assistance to rivals failed
to satisfy the requirements of §2. The Court of Appeals for the
Second Circuit reinstated the complaint in part, including the
antitrust claim. 305 F. 3d 89, 113 (2002). We granted
certiorari, limited to the question whether the Court of Appeals
erred in reversing the District Court’s dismissal of respondent’s
antitrust claims.
538 U. S. 905
(2003).
II
To decide this case, we must
first determine what effect (if any) the 1996 Act has upon the
application of traditional antitrust principles. The Act imposes a
large number of duties upon incumbent LECs—above and beyond those
basic responsibilities it imposes upon all carriers, such as
assuring number portability and providing access to rights-of-way,
see 47 U. S. C. §§251(b)(2), (4). Under the sharing duties of
§251(c), incumbent LECs are required to offer three kinds of
access. Already noted, and perhaps most intrusive, is the duty to
offer access to UNEs on “just, reasonable, and nondiscriminatory”
terms, §251(c)(3), a phrase that the FCC has interpreted to mean a
price reflecting long-run incremental cost. See
Verizon
Communications Inc. v.
FCC, 535 U. S., at 495–496. A
rival can interconnect its own facilities with those of the
incumbent LEC, or it can simply purchase services at wholesale from
the incumbent and resell them to consumers. See §§251(c)(2), (4).
The Act also imposes upon incumbents the duty to allow physical
“collocation”—that is, to permit a competitor to locate and install
its equipment on the incumbent’s premises—which makes feasible
interconnection and access to UNEs. See §251(c)(6).
That Congress created these
duties, however, does not automatically lead to the conclusion that
they can be enforced by means of an antitrust claim. Indeed, a
detailed regulatory scheme such as that created by the 1996 Act
ordinarily raises the question whether the regulated entities are
not shielded from antitrust scrutiny altogether by the doctrine of
implied immunity. See,
e.g., United States v.
National Assn. of Securities Dealers, Inc., 422 U. S. 694 (1975);
Gordon v.
New York Stock Exchange, Inc., 422 U. S. 659 (1975). In
some respects the enforcement scheme set up by the 1996 Act is a
good candidate for implication of antitrust immunity, to avoid the
real possibility of judgments conflicting with the agency’s
regulatory scheme “that might be voiced by courts exercising
jurisdiction under the antitrust laws.”
United States v.
National Assn. of Securities Dealers, Inc., supra, at
734.
Congress, however, precluded that
interpretation. Section 601(b)(1) of the 1996 Act is an
antitrust-specific saving clause providing that “nothing in this
Act or the amendments made by this Act shall be construed to
modify, impair, or supersede the applicability of any of the
antitrust laws.” 110 Stat. 143, 47 U. S. C. §152, note. This
bars a finding of implied immunity. As the FCC has put the point,
the saving clause preserves those “claims that satisfy established
antitrust standards.” Brief for United States and the Federal
Communications Commission as
Amici Curiae Supporting
Neither Party in No. 02–7057,
Covad Communications Co. v.
Bell Atlantic Corp. (CADC), p. 8.
But just as the 1996 Act preserves claims that
satisfy existing antitrust standards, it does not create new claims
that go beyond existing antitrust standards; that would be equally
inconsistent with the saving clause’s mandate that nothing in the
Act “modify, impair, or supersede the applicability” of the
antitrust laws. We turn, then, to whether the activity of which
respondent complains violates preexisting antitrust standards.
III
The complaint alleges that
Verizon denied interconnection services to rivals in order to limit
entry. If that allegation states an antitrust claim at all, it does
so under §2 of the Sherman Act, 15 U. S. C. §2, which declares
that a firm shall not “monopolize” or “attempt to monopolize.”
Ibid. It is settled law that this offense requires, in
addition to the possession of monopoly power in the relevant
market, “the willful acquisition or maintenance of that power as
distinguished from growth or development as a consequence of a
superior product, business acumen, or historic accident.”
United States v.
Grinnell Corp., 384 U. S. 563, 570–571
(1966). The mere possession of monopoly power, and the concomitant
charging of monopoly prices, is not only not unlawful; it is an
important element of the free-market system. The opportunity to
charge monopoly prices—at least for a short period—is what attracts
“business acumen” in the first place; it induces risk taking that
produces innovation and economic growth. To safeguard the incentive
to innovate, the possession of monopoly power will not be found
unlawful unless it is accompanied by an element of anticompetitive
conduct.
Firms may acquire monopoly power
by establishing an infrastructure that renders them uniquely suited
to serve their customers. Compelling such firms to share the source
of their advantage is in some tension with the underlying purpose
of antitrust law, since it may lessen the incentive for the
monopolist, the rival, or both to invest in those economically
beneficial facilities. Enforced sharing also requires antitrust
courts to act as central planners, identifying the proper price,
quantity, and other terms of dealing—a role for which they are
ill-suited. Moreover, compelling negotiation between competitors
may facilitate the supreme evil of antitrust: collusion. Thus, as a
general matter, the Sherman Act “does not restrict the long
recognized right of [a] trader or manufacturer engaged in an
entirely private business, freely to exercise his own independent
discretion as to parties with whom he will deal.”
United
States v.
Colgate & Co., 250 U. S. 300, 307
(1919).
However, “[t]he high value that we have placed
on the right to refuse to deal with other firms does not mean that
the right is unqualified.”
Aspen Skiing Co. v.
Aspen
Highlands Skiing Corp., 472 U. S. 585, 601
(1985). Under certain circumstances, a refusal to cooperate with
rivals can constitute anticompetitive conduct and violate §2. We
have been very cautious in recognizing such exceptions, because of
the uncertain virtue of forced sharing and the difficulty of
identifying and remedying anticompetitive conduct by a single firm.
The question before us today is whether the allegations of
respondent’s complaint fit within existing exceptions or provide a
basis, under traditional antitrust principles, for recognizing a
new one.
The leading case for §2 liability based on
refusal to cooperate with a rival, and the case upon which
respondent understandably places greatest reliance, is
Aspen
Skiing, supra. The Aspen ski area consisted of four
mountain areas. The defendant, who owned three of those areas, and
the plaintiff, who owned the fourth, had cooperated for years in
the issuance of a joint, multiple-day, all-area ski ticket. After
repeatedly demanding an increased share of the proceeds, the
defendant canceled the joint ticket. The plaintiff, concerned that
skiers would bypass its mountain without some joint offering, tried
a variety of increasingly desperate measures to re-create the joint
ticket, even to the point of in effect offering to buy the
defendant’s tickets at retail price.
Id., at 593–594. The
defendant refused even that. We upheld a jury verdict for the
plaintiff, reasoning that “[t]he jury may well have concluded that
[the defendant] elected to forgo these short-run benefits because
it was more interested in reducing competition … over the long run
by harming its smaller competitor.”
Id., at 608.
Aspen Skiing is at or near the outer
boundary of §2 liability. The Court there found significance in the
defendant’s decision to cease participation in a cooperative
venture. See
id., at 608, 610–611. The unilateral
termination of a voluntary (
and thus presumably
profitable) course of dealing suggested a willingness to
forsake short-term profits to achieve an anticompetitive end.
Ibid. Similarly, the defendant’s unwillingness to renew
the ticket
even if compensated at retail price revealed a
distinctly anticompetitive bent.
The refusal to deal alleged in the present
case does not fit within the limited exception recognized in
Aspen Skiing. The complaint does not allege that Verizon
voluntarily engaged in a course of dealing with its rivals, or
would ever have done so absent statutory compulsion. Here,
therefore, the defendant’s prior conduct sheds no light upon the
motivation of its refusal to deal—upon whether its regulatory
lapses were prompted not by competitive zeal but by anticompetitive
malice. The contrast between the cases is heightened by the
difference in pricing behavior. In
Aspen Skiing, the
defendant turned down a proposal to sell at its own retail price,
suggesting a calculation that its future monopoly retail price
would be higher. Verizon’s reluctance to interconnect at the
cost-based rate of compensation available under §251(c)(3) tells us
nothing about dreams of monopoly.
The specific nature of what the 1996 Act
compels makes this case different from
Aspen Skiing in a
more fundamental way. In
Aspen Skiing, what the defendant
refused to provide to its competitor was a product that it already
sold at retail—to oversimplify slightly, lift tickets representing
a bundle of services to skiers. Similarly, in
Otter Tail Power
Co. v.
United States, 410 U. S. 366 (1973),
another case relied upon by respondent, the defendant was already
in the business of providing a service to certain customers (power
transmission over its network), and refused to provide the same
service to certain other customers.
Id., at 370–371,
377–378. In the present case, by contrast, the services allegedly
withheld are not otherwise marketed or available to the public. The
sharing obligation imposed by the 1996 Act created “something brand
new”—“the wholesale market for leasing network elements.”
Verizon Communications Inc. v.
FCC, 535 U. S., at
528. The unbundled elements offered pursuant to §251(c)(3) exist
only deep within the bowels of Verizon; they are brought out on
compulsion of the 1996 Act and offered not to consumers but to
rivals, and at considerable expense and effort. New systems must be
designed and implemented simply to make that access
possible—indeed, it is the failure of one of those systems that
prompted the present complaint.[
Footnote 3]
We conclude that Verizon’s alleged
insufficient assistance in the provision of service to rivals is
not a recognized antitrust claim under this Court’s existing
refusal-to-deal precedents. This conclusion would be unchanged even
if we considered to be established law the “essential facilities”
doctrine crafted by some lower courts, under which the Court of
Appeals concluded respondent’s allegations might state a claim. See
generally Areeda, Essential Facilities: An Epithet in Need of
Limiting Principles, 58 Antitrust L. J. 841 (1989). We have never
recognized such a doctrine, see
Aspen Skiing Co., 472 U.
S., at 611, n. 44;
AT&T Corp. v.
Iowa Utilities
Bd., 525 U. S., at 428 (opinion of Breyer, J.), and we find no
need either to recognize it or to repudiate it here. It suffices
for present purposes to note that the indispensable requirement for
invoking the doctrine is the unavailability of access to the
“essential facilities”; where access exists, the doctrine serves no
purpose. Thus, it is said that “essential facility claims should …
be denied where a state or federal agency has effective power to
compel sharing and to regulate its scope and terms.” P. Areeda
& H. Hovenkamp, Antitrust Law, p. 150, ¶ ;773e (2003
Supp.). Respondent believes that the existence of sharing duties
under the 1996 Act supports its case. We think the opposite: The
1996 Act’s extensive provision for access makes it unnecessary to
impose a judicial doctrine of forced access. To the extent
respondent’s “essential facilities” argument is distinct from its
general §2 argument, we reject it.
IV
Finally, we do not believe that
traditional antitrust principles justify adding the present case to
the few existing exceptions from the proposition that there is no
duty to aid competitors. Antitrust analysis must always be attuned
to the particular structure and circumstances of the industry at
issue. Part of that attention to economic context is an awareness
of the significance of regulation. As we have noted, “careful
account must be taken of the pervasive federal and state regulation
characteristic of the industry.”
United States v.
Citizens & Southern Nat. Bank, 422 U. S. 86, 91 (1975);
see also IA P. Areeda & H. Hovenkamp, Antitrust Law,
p. 12, ¶ ;240c3 (2d ed. 2000). “[A]ntitrust analysis must
sensitively recognize and reflect the distinctive economic and
legal setting of the regulated industry to which it applies.”
Concord v.
Boston Edison Co., 915 F. 2d 17,
22 (CA1 1990) (Breyer, C. J.) (internal quotation marks
omitted).
One factor of particular
importance is the existence of a regulatory structure designed to
deter and remedy anticompetitive harm. Where such a structure
exists, the additional benefit to competition provided by antitrust
enforcement will tend to be small, and it will be less plausible
that the antitrust laws contemplate such additional scrutiny.
Where, by contrast, “[t]here is nothing built into the regulatory
scheme which performs the antitrust function,”
Silver v.
New York Stock Exchange, 373 U. S. 341, 358
(1963), the benefits of antitrust are worth its sometimes
considerable disadvantages. Just as regulatory context may in other
cases serve as a basis for implied immunity, see,
e.g.,
United States v.
National Assn. of Securities Dealers,
Inc., 422 U. S., at 730–735, it may also be a consideration in
deciding whether to recognize an expansion of the contours of
§2.
The regulatory framework that exists in this
case demonstrates how, in certain circumstances, “regulation
significantly diminishes the likelihood of major antitrust harm.”
Concord v.
Boston Edison Co.,
supra, at
25. Consider, for example, the statutory restrictions upon
Verizon’s entry into the potentially lucrative market for
long-distance service. To be allowed to enter the long-distance
market in the first place, an incumbent LEC must be on good
behavior in its local market. Authorization by the FCC requires
state-by-state satisfaction of §271’s competitive checklist, which
as we have noted includes the nondiscriminatory provision of access
to UNEs. Section 271 applications to provide long-distance service
have now been approved for incumbent LECs in 47 States and the
District of Columbia. See FCC Authorizes SBC to Provide Long
Distance Service in Illinois, Indiana, Ohio and Wisconsin (Oct. 15,
2003), http://hraunfoss.fcc.gov/edocs_
public/attachmatch/DOC-239978A1.pdf.
The FCC’s §271 authorization order for Verizon
to provide long-distance service in New York discussed at great
length Verizon’s commitments to provide access to UNEs, including
the provision of OSS.
In re Application by Bell Atlantic New
York for Authorization Under Section 271 of the Communications Act
To Provide In-Region, InterLATA Service in the State of New
York, 15 FCC Rcd. 3953, 3989–4077, ¶ ;¶ ;82–228 (1999)
(Memorandum Opinion and Order) (hereinafter
In re
Application). Those commitments are enforceable by the FCC
through continuing oversight; a failure to meet an authorization
condition can result in an order that the deficiency be corrected,
in the imposition of penalties, or in the suspension or revocation
of long-distance approval. See 47 U. S. C. §271(d)(6)(A).
Verizon also subjected itself to oversight by the PSC under a
so-called “Performance Assurance Plan” (PAP). See
In re New
York Telephone Co., 197 P. U. R. 4th 266, 280–281
(N. Y. PSC, 1999) (Order Adopting the Amended PAP)
(hereinafter PAP Order). The PAP, which by its terms became binding
upon FCC approval, provides specific financial penalties in the
event of Verizon’s failure to achieve detailed performance
requirements. The FCC described Verizon’s having entered into a PAP
as a significant factor in its §271 authorization, because that
provided “a strong financial incentive for post-entry compliance
with the section 271 checklist,” and prevented
“ ‘ backsliding.’ ”
In re Application
3958–3959, ¶ ;¶ ;8, 12.
The regulatory response to the OSS failure
complained of in respondent’s suit provides a vivid example of how
the regulatory regime operates. When several competitive LECs
complained about deficiencies in Verizon’s servicing of orders, the
FCC and PSC responded. The FCC soon concluded that Verizon was in
breach of its sharing duties under §251(c), imposed a substantial
fine, and set up sophisticated measurements to gauge remediation,
with weekly reporting requirements and specific penalties for
failure. The PSC found Verizon in violation of the PAP even
earlier, and imposed additional financial penalties and
measurements with
daily reporting requirements. In short,
the regime was an effective steward of the antitrust function.
Against the slight benefits of antitrust
intervention here, we must weigh a realistic assessment of its
costs. Under the best of circumstances, applying the requirements
of §2 “can be difficult” because “the means of illicit exclusion,
like the means of legitimate competition, are myriad.”
United
States v.
Microsoft Corp., 253 F. 3d 34, 58
(CADC 2001) (en banc)
(per curiam). Mistaken inferences
and the resulting false condemnations “are especially costly,
because they chill the very conduct the antitrust laws are designed
to protect.”
Matsushita Elec. Industrial Co. v.
Zenith
Radio Corp., 475 U. S. 574, 594
(1986). The cost of false positives counsels against an undue
expansion of §2 liability. One false-positive risk is that an
incumbent LEC’s failure to provide a service with sufficient
alacrity might have nothing to do with exclusion. Allegations of
violations of §251(c)(3) duties are difficult for antitrust courts
to evaluate, not only because they are highly technical, but also
because they are likely to be extremely numerous, given the
incessant, complex, and constantly changing interaction of
competitive and incumbent LECs implementing the sharing and
interconnection obligations.
Amici States have filed a
brief asserting that competitive LECs are threatened with “death by
a thousand cuts,” Brief for New York et al. as
Amici
Curiae 10 (internal quotation marks omitted)–the
identification of which would surely be a daunting task for a
generalist antitrust court. Judicial oversight under the Sherman
Act would seem destined to distort investment and lead to a new
layer of interminable litigation, atop the variety of litigation
routes already available to and actively pursued by competitive
LECs.
Even if the problem of false positives did not
exist, conduct consisting of anticompetitive violations of §251 may
be, as we have concluded with respect to above-cost predatory
pricing schemes, “beyond the practical ability of a judicial
tribunal to control.”
Brooke Group Ltd. v.
Brown &
Williamson Tobacco Corp., 509 U. S. 209, 223
(1993). Effective remediation of violations of regulatory sharing
requirements will ordinarily require continuing supervision of a
highly detailed decree. We think that Professor Areeda got it
exactly right: “No court should impose a duty to deal that it
cannot explain or adequately and reasonably supervise. The problem
should be deemed irremedia[ble] by antitrust law when compulsory
access requires the court to assume the day-to-day controls
characteristic of a regulatory agency.” Areeda, 58 Antitrust
L. J., at 853. In this case, respondent has requested an
equitable decree to “[p]reliminarily and permanently enjoi[n]
[Verizon] from providing access to the local loop market … to
[rivals] on terms and conditions that are not as favorable” as
those that Verizon enjoys. App. 49–50. An antitrust court is
unlikely to be an effective day-to-day enforcer of these detailed
sharing obligations.[
Footnote
4]
* * *
The 1996 Act is in an important
respect much more ambitious than the antitrust laws. It attempts
“
to eliminate the monopolies enjoyed by the inheritors of
AT&T’s local franchises.”
Verizon Communications Inc.
v.
FCC, 535 U. S., at 476 (emphasis added). Section 2 of
the Sherman Act, by contrast, seeks merely to prevent
unlawful
monopolization. It would be a serious mistake to conflate the
two goals. The Sherman Act is indeed the “Magna Carta of free
enterprise,”
United States v.
Topco Associates,
Inc., 405 U. S.
596, 610 (1972), but it does not give judges
carte
blanche to insist that a monopolist alter its way of doing
business whenever some other approach might yield greater
competition. We conclude that respondent’s complaint fails to state
a claim under the Sherman Act.[
Footnote 5]
Accordingly, the judgment of the
Court of Appeals is reversed, and the case is remanded for further
proceedings consistent with this opinion.
It is so ordered.
Footnote 1
In 1996, NYNEX was the incumbent LEC for New
York State. NYNEX subsequently merged with Bell Atlantic
Corporation, and the merged entity retained the Bell Atlantic name;
a further merger produced Verizon. We use “Verizon” to refer to
NYNEX and Bell Atlantic as well.
Footnote 2
Order Directing Improvements To Wholesale
Service Performance,
MCI Worldcom, Inc. v.
Bell
Atlantic-New York, Nos. 00–C–0008, 00–C–0009, 2000 WL 363378
(N. Y. PSC, Feb. 11, 2000); Order Directing Market Adjustments and
Amending Performance Assurance Plan,
MCI Worldcom, Inc. v.
Bell Atlantic-New York, Nos. 00–C–0008, 00–C–0009,
99–C–0949, 2000 WL 517633 (N. Y. PSC, Mar. 23, 2000); Order
Addressing OSS Issues,
MCI Worldcom, Inc. v.
Bell
Atlantic-New York, Nos. 00–C–0008, 00–C–0009, 99–C–0949, 2000
WL 1531916 (N. Y. PSC, July 27, 2000);
In re Bell
Atlantic-New York Authorization Under Section 271 of the
Communications Act to Provide In-Region, InterLATA Service In the
State of New York, 15 FCC Rcd. 5413 (2000) (Order);
id., at 5415 (Consent Decree).
Footnote 3
Respondent also relies upon
United
States v.
Terminal Railroad Assn. of St. Louis,
224 U. S. 383
(1912), and
Associated Press v.
United States,
326 U. S. 1
(1945). These cases involved
concerted action, which
presents greater anticompetitive concerns and is amenable to a
remedy that does not require judicial estimation of free-market
forces: simply requiring that the outsider be granted
nondiscriminatory admission to the club.
Footnote 4
The Court of Appeals also thought that
respondent’s complaint might state a claim under a “monopoly
leveraging” theory (a theory barely discussed by respondent, see
Brief for Respondent 24, n. 10). We disagree. To the extent the
Court of Appeals dispensed with a requirement that there be a
“dangerous probability of success” in monopolizing a second market,
it erred,
Spectrum Sports, Inc. v.
McQuillan,
506 U. S. 447,
459 (1993). In any event, leveraging presupposes anticompetitive
conduct, which in this case could only be the refusal-to-deal claim
we have rejected.
Footnote 5
Our disposition makes it unnecessary to
consider petitioner’s alternative contention that respondent lacks
antitrust standing. See
Steel Co. v.
Citizens for
Better Environment,
523 U. S. 83, 97, and n.
2 (1998);
National Railroad Passenger Corporation v.
National Assn. of Railroad Passengers,
414 U. S. 453, 456
(1974).
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