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Federal Register / Vol. 86, No. 150 / Monday, August 9, 2021 / Notices requires proof of 1 the possession of monopoly power in the relevant market and 2 the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of superior product, business acumen or historic accident. 5
A. Monopolization and Restraint of Trade as to Monopolized Products
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An exclusive dealing arrangement is an agreement in which a buyer agrees to purchase certain goods or services only from a particular seller for a certain period of time. 6 Exclusivity need not be expressly defined by a written contract, but can also be identified by looking past the terms of the contract to ascertain the relationship between the parties and the effect of the agreement in the real world. 7 No single contract needs to require 100% exclusivity.8 The assessment must look beyond formalistic distinctions and focus on market realities. 9
Exclusive dealing may be unlawful where it enables a firm to maintain or enhance monopoly or market power by impairing the ability of rivals to grow into effective competitors or by depriving customers of the ability to make a meaningful choice.10 Of particular relevance is whether exclusive dealing has foreclosed competition in such a substantial share of the relevant market so as to adversely affect competition. 11 Exclusive dealing may violate Section 1 or Section 2 of the Sherman Act, but is of special concern when imposed by a monopolist. 12
Thus, a Section 2 exclusive dealing claim typically requires a greater degree of market power, but a lesser degree of 5 In re McWane, Inc., No. 9351, 2014 WL 556261, at 11 F.T.C. Jan. 30, 2014, affd, 783 F.3d 814
11th Cir. 2015 quoting United States v. Grinnell Corp., 384 U.S. 563, 57071 1966; 15 U.S.C. 2.
6 ZF Meritor v. Eaton Corp., 696 F.3d 254, 270 3d Cir. 2012.
7 Id. cleaned up noting also that de facto exclusive dealing claims are cognizable under the antitrust laws.; see also Tampa Elec. Co. v.
Nashville Coal Co., 365 U.S. 320, 326 1961
exclusive dealing principles apply not only to contracts that expressly require exclusivity, but also to those that have the practical effect of inducing a customer to purchase exclusively from a dominant seller.
8 ZF Meritor, 696 F.3d at 270; see also Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 46667 1992 Legal presumptions that rest on formalistic distinctions rather than actual market realities are generally disfavored in antitrust law..
9 Eastman Kodak, 504 U.S. at 466.
10 See, e.g., In re McWane, 2014 WL 556261 at 19, 28.
11 ZF Meritor, 696 F.3d at 270; see also McWane, 783 F.3d at 835.
12 ZF Meritor, 696 F.3d at 271.

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market foreclosure, than an exclusive dealing claim under Section 1.13
The factual allegations in the complaint support a finding of exclusive dealing as to the Monopolized Products in violation of Sections 1 and 2 of the Sherman Act. Broadcom has monopoly power in the sale of these products, as demonstrated by both direct and indirect evidence, including high shares of markets with significant entry barriers. And Broadcom has engaged in exclusive dealing with OEMs and service providers through both formal agreements that bar purchases of Monopolized Products from a Broadcom rival and ad hoc threats of retaliation if a customer purchases from a Broadcom rival. Broadcoms exclusive deals foreclosed substantial and competitively important portions of the markets for Monopolized Products, weakening rivals, harming competition, maintaining Broadcoms monopoly position, and resulting in reduced customer choice, higher prices, and less innovation in markets for Monopolized Products.
B. Restraint of Trade as to Related Products In addition to harming competition in the markets for Monopolized Products, Broadcom leveraged its monopoly power in the markets for Monopolized Products to foreclose rivals and harm competition in the markets for Related Products. As it involves the interaction of two or more markets, the conduct is appropriately analyzed with reference to tying precedent. To demonstrate tying in violation of Section 1, a plaintiff must show 1 separate markets for the tying and tied products; 2 defendants market power in the tying market; 3
the existence of a tie, and 4 that the arrangement forecloses a substantial volume of interstate commerce in the market for the tied product.14 Coercion, or the sellers exploitation of its control over the tying product to force the buyer into the purchase of a tied product that the buyer either did not want at all, or might have preferred to purchase 13 See, e.g., United States v. Microsoft Corp., 253
F.3d 34, 6970 D.C. Cir. 2001.
14 See, e.g., Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 46162 1992
quoting N. Pac. R. Co. v. United States, 356 U.S.
1, 56 1958 and Fortner Enters., Inc. v. United States Steel Corp, 394 U.S. 495, 503 1969; United States v. Microsoft, 253 F.3d 34, 85, 87 D.C. Cir.
2001 the core concern is that tying prevents goods from competing directly for consumer choice on their merits; Tic-X-Press v. Omni Promotions Co., 815 F.2d 1407, 1414 11th Cir. 1987; see also Viamedia, Inc. v. Comcast Corp., 951 F.3d 429, 468
7th Cir. 2020; Inre Sandoz Pharms. Corp., 115
F.T.C. 625, 62930 1992.

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elsewhere on different terms, 15 is a key element in showing the existence of a tie, and can be shown using direct or circumstantial evidence.16 Such coercion need not take the form of a threat to completely withhold the tying product; a tie may also exist where the seller offers the tying product on such terms that, under the circumstances, accepting the tying and tied products together is the only viable economic option for the buyer.17 Finally, harm is particularly likely when the tied markets are concentrated and the tie results in substantial foreclosure in these markets.18
The factual allegations in the complaint support a finding of a violation of Section 1 of the Sherman Act as to the Related Products.
Broadcom placed conditions on the supply and service terms associated with the Monopolized Products so as to coerce customers to source Related Products exclusively or nearlyexclusively from Broadcom. The crossconditionality was employed in the negotiation and enforcement of relevant formal agreements and was also present in Broadcoms ad hoc threats of retaliation. As with the Monopolized Products, Broadcoms conduct has foreclosed substantial and competitively important portions of the concentrated markets for Related Products, weakening rivals, harming competition, and resulting in reduced customer choice, higher prices, and less innovation in markets for Related Products.
IV. The Proposed Order The proposed order seeks to remedy Broadcoms anticompetitive conduct through three primary prohibitions. A
core concept of the order is what is termed a majority share requirement, referring to a requirement that a customer purchase more than 50% of the customers requirements of a given product come from Broadcom. First, the order prohibits Broadcom from entering into majority share requirements for any Monopolized Product. Second, the order prohibits Broadcom from conditioning access to Monopolized Products on a customers agreeing to a majority share requirement for specified Related Products. Third, the order prohibits 15 Jefferson Par. Hosp. Dist. No. 2 v. Hyde, 466
U.S. 2, 12 1984.
16 See, e.g., Tic-X-Press, 815 F.2d at 1418.
17 See, e.g., United Shoe Mach. Corp. v. United States, 258 U.S. 451, 464 1922; Viamedia, 951
F.3d at 47072.
18 See, e.g., Areeda & Hovenkamp, Antitrust Law 1729; see also Einer Elhauge, Tying, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, 123 Harv. L. Rev. 397, 413 2009.

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