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Law School Case Brief

Otter Tail Power Co. v. United States - 410 U.S. 366, 93 S. Ct. 1022 (1973)

Rule:

Use of monopoly power to destroy threatened competition is a violation of the attempt to monopolize clause of § 2 of the Sherman Act. So are agreements not to compete, with the aim of preserving or extending a monopoly.

Facts:

In a government civil antitrust suit brought against Otter Tail Power Company (“Otter Tail”) in the United States District Court for the District of Minnesota, Otter Tail was found to have violated 2 of the Sherman Act by monopolizing and attempting to monopolize the retail distribution of electric power in its service area by attempting to prevent communities in which its retail distribution franchise had expired from replacing it with a municipal distribution system. The district court entered a decree enjoining Otter Tail from using litigation to delay or interfere with the establishment of a municipal electric power system.

Issue:

Did the district court err in finding that Otter Tail monopolized retail distribution of electric power in its service area and did it err in enjoining petitioner from using litigation to delay or interfere with the establishment of a municipal electric power system?

Answer:

No

Conclusion:

The Court affirmed, in part, and held that the Federal Power Act (Act) did not exempt Otter Tail from antitrust regulations, with respect to its refusal to deal. Nothing in the Act revealed a purpose to insulate electric power companies from the operation of antitrust laws. Respondent government had limited authority to order interconnections when necessary and in the public interest, but such authority was not intended as a substitute for antitrust regulation. Otter Tail's refusals to sell were solely to prevent municipal power systems from eroding its monopolistic position.

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