The Monopoly Leveraging Theory In Antitrust Law

Coca-Cola's bid to acquire China Huiyuan Juice Group was the first case rejected by The Ministry of Commerce (MOC) since the implementation of the China's Law on anti-monopoly, which cause widespread concern in society. The MOC believes this takeover will forecloses the competition of the related markets, because Coca-Cola is possible to leverage its monopoly power in the carbonated beverage market to the fruit juice beverage market.Monopoly leveraging theory can be explained as one monopolist take advantage of its dominant position in primary market and extend its power into the second market, albeit without monopolize or an attempt to monopolize the second market. Leveraging theory developed from the judicial practice of U.S antitrust law, which deemed to be one criterion to judge dominant position abuse in some cases. As influenced by the different viewpoints of different schools of economics, the American courts argue whether leverage exists and whether it constitutes a valid cause of action under Section 2 of the Sherman Act.This article first introduces the development of monopoly leveraging theory, and then elaborates the traditional monopoly leveraging theory and the disputes between Chicago school scholars and Post-Chicago school scholars on leveraging theory—whether leverage behavior can restrict competition. This article consider the defensive leveraging theory provide a plausible reason to explain why monopolist take advantage of leverage. At the end, this article comments on the reason for rejection of MOC on the leveraging theory basis.