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Antitrust, Web3 And Blockchain Technology: A Quick Look Into The Refusal To Deal Theory As Exclusionary Conduct

 |  June 21, 2023

By: Luis Blanquez (The Antitrust Attorney)

A company utilizing blockchain technology, or potentially the blockchain itself, and holding a significant portion of the market, could potentially fall under the purview of U.S. antitrust laws as a monopolistic entity. However, it is important to note that simply being a monopoly is not inherently illegal. Instead, a company must actively employ its monopoly power to purposefully sustain that power through actions that restrict competition.

Therefore, a claim of monopolization necessitates two factors: (i) the possession of monopoly power within the relevant market, meaning the ability to control output or increase prices above what would be viable in a competitive market; and (ii) the deliberate acquisition or maintenance of that power, distinct from achieving it through superior products, business expertise, or even fortuitous circumstances. This distinction was established in United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966).

It is possible for the monopolistic entity to provide a legitimate business rationale for its behavior that hinders the success of other firms in the market. For example, the monopolist may be engaging in fair competition that benefits consumers by means of increased efficiency or offering a distinctive array of products or services…