FTC Petitions for Rehearing En Banc in Rambus
Here is the FTC’s petition for rehearing en banc. The brief is all about the critical issue of causation.
- The FTC argues that the panel decision conflicts with Microsoft’s holding on causation in monopolization cases, i.e., whether the conduct “reasonably appears capable of making a significant contribution to … monopoly power.” The panel decision, in contrast, imposes a strict but for requirement, i.e., the plaintiff has to show that, after full disclosure, the SSO would not have adopted the defendant’s technologies. Proof of a hypothetical is indeed a tough standard to meet.
- The FTC then takes issue with the panel’s expansion of NYNEX v. Discon. In a previous post, I explained why the reliance on Discon is indeed somewhat strange. Discon is a “market power first, deception second” case. Here, the FTC argues predictably that Rambus is a “deception first, market power second” case, or, more specifically, a case in which pre-existing market power was increased as a result of the deception.
Absent Rambus’s deception, the competition to become part of the standard would have limited the price Rambus could have charged for its technologies and subjected it to the opportunity for ex ante negotiations. Rambus’s avoidance of these constrains was not the ex post exercise of market power by a lawful monopolist; it was the mechanism by which Rambus secured its monopoly. (My emphasis).
“Increased” might have been clearer than “secured,” to emphasize the incremental, additive effect of the alleged deception.
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