Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993), was a case in which the Supreme Court of the United States rejected the assertion that attempted monopolization may be proven merely by demonstration of unfair or predatory conduct. Instead, conduct of a single firm could be held to be unlawful attempted monopolization only when it actually monopolized or dangerously threatened to do so. Thus, the Court rejected the conclusion that injury to competition could be presumed to follow from certain conduct. The causal link must be demonstrated.

Background

Defendants held the patent to a polymer used in athletic goods. Plaintiff distributor refused to sell its right to develop goods made from the material, so that it could retain its rights to manufacture equestrian products. Defendants appointed another distributor. Plaintiff brought suit, claiming violations of the Sherman Act and Clayton Act, 15 U.S.C.S. §§ 2 and 3, the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.S. § 1962, and state unfair practices law. The trial court found defendants liable for attempted monopolization and denied their motions for judgment notwithstanding the verdict and for a new trial. The Ninth Circuit affirmed. Defendants appealed, claiming that plaintiffs failed to prove the elements of attempted monopolization. Defendants claimed reversal was required where defendants' specific intent to monopolize was not proven.

Held

The Supreme Court reversed, holding the trial court erred in finding evidence of unfair or predatory conduct was sufficient to satisfy the specific intent and dangerous elements of the offense. Without proof of these elements or the relevant product market, liability could not attach. The judgment holding that defendants were liable for attempted monopolization under the Sherman Act, 15 U.S.C.S. § 2, was reversed absent proof of a dangerous probability that defendants would monopolize a particular market and a specific intent to monopolize. Intent could not be inferred by evidence of unfair or predatory conduct alone.

Reasoning

"Every other Court of Appeals has indicated that proving an attempt to monopolize requires proof of a dangerous probability of monopolization of a relevant market." Quoted in the Spectrum opinion, along with the following citations: §2 of the Sherman Act addresses the actions of single firms that monopolize or attempt to monopolize, as well as conspiracies and combinations to monopolize. However, it does not define the elements of the offense of attempted monopolization. Nor is there much guidance to be had in the scant legislative history of that provision, which was added late in the legislative process. Rather, the legislative history indicates that much of the interpretation of the necessarily broad principles of the Act was to be left for the courts in particular cases. When in 1905 the Supreme Court first addressed the meaning of attempt to monopolize under § 2, it wrote as follows: "Where acts are not sufficient in themselves to produce a result which the law seeks to prevent—for instance, the monopoly—but require further acts in addition to the mere forces of nature to bring that result to pass, an intent to bring it to pass is necessary in order to produce a dangerous probability that it will happen. Commonwealth v. Peaslee, 177 Massachusetts 267, 272 [59 N.E. 55, 56 (1901) ]. But when that intent and the consequent dangerous probability exist, this statute, like many others and like the common law in some cases, directs itself against that dangerous probability as well as against the completed result." The Court went on to explain, however, that not every act done with intent to produce an unlawful result constitutes an attempt. "It is a question of proximity and degree.". "Swift thus indicated that intent is necessary, but alone is not sufficient, to establish the dangerous probability of success that is the object of § 2's prohibition of attempts." "The Court's decisions since Swift have reflected the view that the plaintiff charging attempted monopolization must prove a dangerous probability of actual monopolization, which has generally required a definition of the relevant market and examination of market power." The Courts of Appeals other than the Ninth Circuit have followed this approach. It is generally required that to demonstrate attempted monopolization a plaintiff must prove: "In order to determine whether there is a dangerous probability of monopolization, courts have found it necessary to consider the relevant market and the defendant's ability to lessen or destroy competition in that market."

Opposition to the Lessig opinion

The Supreme Court explained its opposition to the Lessig opinion: