Friday, January 17, 2014

Verizon Comms., Inc. v. Law Offices of Curtis V. Trinko, LLP case brief summary

Verizon Comms.,  Inc. v. Law Offices of Curtis V. Trinko, LLP case brief summary

Following the 1996 Telecoms Act, Verizon had an obligation to assist competitive local exchange carriers by selling access to “unbundled” elements of its network. Following complaints by CLECs to the FCC and an investigation, Verizon entered a consent decree with the FTC and a settlement with the CLECs. The day after the consent notice, Trinko, a customer of AT&T, brought a class action by customers of the CLECs alleging discrimination in filling orders in order to discourage customers from abandoning Verizon and joining CLECs.

The Court characterized the claim as a refusal to deal claim under Sherman § 2, but concluded Verizon’s alleged insufficient assistance, as required by the 1996 Telecoms Act, was not an antitrust claim.
  • There was already a detailed, complex, and dynamic regulatory scheme in place that was actively enforced by state and federal agencies, created by the 1996 Telecoms Act.
  • There was no history of prior dealing and no indication that the dominant firm would have every willingly sold to the CLECs without the requirements of the Telecoms Act.
  • A refusal to cooperate with rivals in an ongoing policy still violates Aspen, but compelling firms to cooperate is disfavored because it places the courts beyond their institutional competency and reduces incentives for rivals and monopolists to invest.
  • The Court characterizes Aspen narrowly, restricting it to situations where the monopolist unilaterally terminates a voluntary dealing and suggests a willingness to forsake short-term profits to achieve an anticompetitive end.
  • The rhetoric in Trinko is extremely skeptical towards monopolization.

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