United States v. Google/Conclusions of Law/Section 6A
- A. The Exclusive Agreements Foreclose a Substantial Share of the Market.
As previously discussed, evaluating an alleged exclusive dealing agreement first requires an estimation of market foreclosure. See supra Section V.A.1. Recall, the D.C. Circuit has said that “a monopolist’s use of exclusive contracts . . . may give rise to a § 2 violation even though the contracts foreclose less than the roughly 40% or 50% share usually required in order to establish a § 1 violation.” Microsoft, 253 F.3d at 70; see also McWane, 783 F.3d at 837 (“Traditionally a foreclosure percentage of at least 40% has been a threshold for liability in exclusive dealing cases.”).
Here, Dr. Whinston has calculated that Google’s distribution agreements foreclose 45% of the text ads market, measured by ad spend. FOF ¶ 192. As before, Google does not dispute the underlying methodology used to calculate this figure, but rather mounts various objections as to its sufficiency, each of which the court has already considered and rejected. Supra Section V.A.1. Google does not make additional arguments specific to the text ads foreclosure percentage. See GTB at 41–47.
The court thus accepts Dr. Whinston’s determination that the challenged agreements foreclose 45% of the general search text ads market. The court also concludes that the market foreclosure is significant in light of same factors that court considered in the general search market. See supra Section V.A.1.b.