Remedies

Section 2 Remedies: 3 types of remedies

Injunctive relief:
1. Conduct remedies: prevent a firm from engaging in some activity
  - Typical remedy (much more common than divestiture)
  - Remedies often require oversight from the courts, which costs the courts money and time
  - Other examples: modify exclusionary contract terms, compulsory licensing
2. Structural remedies: dismantle the firm in some way
  - Divestitures: monopoly power acquired through acquisition
  - Single-firm cases: last one in 1982 with breakup of AT&T
Damages:
1. Treble damages: P is a rival firm that is harmed through exclusion (anticompetitive conduct), receive triple damages
2. Costs
3. Attorney's fees

Conduct remedies:

Conduct examples:
- Court prohibited Microsoft from excluding Netscape or Java and from having exclusive contracts
- Court required Google not to give special treatment to its search engine
Judicial supervision examples:
- Duties to deal with customers:
  - BMI: the nonexclusive blanket license was upheld because it enabled artists to receive money for their music that they wouldn't have otherwise (CBS had duty to deal with customers through BMI to maintain music market)
- Duties to deal with competitors:
  - Microsoft: Court had to oversee Microsoft to make sure they were complying with court orders
  - Aspen Skiing: court declines to require certain provisions of the all-area ticket to be included because the conduct requirement would require the court to oversee the process, which would be burdensome
  - Trinko: court claims it isn't their role to oversee the telecoms, this is the responsibility of the regulatory commission
Modify exclusionary contract terms:
- Google: Google required to modify contract with Apple saying they were the default search engine
Compulsory licensing (IP and antitrust)

Structural remedies: court has not enacted a major structural remedy since the breakup of AT&T in 1982

Difference between EU and U.S. approaches to monopolization cases:

EU: civil cases can involve fines
U.S.: civil cases can't involve fines, only criminal cases involve fines
- U.S. approach: financial punishments for antitrust violations under civil law come through follow-on cases following the initial discovery of liability
- Don't award the initial case to have fines because doing so may result in windfall gains to competitors rather than promote competition

Caselaw:

Holding: admin dropped case
- District court ordered divestiture into operating system business and applications business
  - Krugman critique: if you break up a seller of complements, the total price consumers pay will probably increase
- Appellate court vacates the remedy because district court judge was behaving improperly

Holding:
- What was Google required to do (1-3 are the main requirements):
  1. No exclusive distribution: Google can't have a contract with Apple that requires Apple to feature competing search engines
  2. Make available to competitors certain search index and user-interaction data
  3. Offer competitors search and search ads "syndication" services (e.g., must provide results to AI companies)
  4. Disclose material changes to auction formats
- What is Google not required to do:
  1. Divest Chrome or Android: too aggressive, most of Google's success has come from it being a better product
  2. Stop payments for default positions: Google will likely have the default position if they don't pay, why take $50 billion of revenue out of the ecosystem
    - Note: this neuters the opinion, while Google can't specify exclusion they can still exclude by buying up the space
  3. Offer choice screens for consumers: iPhone asks what search engine you prefer on setup
  4. Limit self-preferencing of its own products (e.g., search default on Chrome)
Facts: Google's conduct is highly analogous to Microsoft's, but not so extreme. Microsoft told online providers that they had to use Internet Explorer and not Netscape, Google was just paying for default position with Apple (which the court found to be exclusionary)