Supreme Court Finds for Verizon in Antitrust Case
Tue January 13, 2004 04:51 PM ET
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By Peter Kaplan
WASHINGTON (Reuters) - The U.S. Supreme Court on Tuesday rejected a closely watched consumer lawsuit against regional telephone company Verizon Communications (VZ.N: Quote, Profile, Research) that could have exposed phone companies to triple-damage lawsuits.
The unanimous decision reversed a U.S. appeals court ruling that could have let consumers sue regional phone companies for not providing competitors with enough access to their dominant phone networks.
"This is what we asked the court to hold," said Verizon deputy general counsel John Thorne. "This is just a reaffirmation that antitrust (laws) never required companies to dismantle themselves to help their rivals."
The appeals court had cited an antitrust theory that held that a monopolist has a duty to provide competitors with reasonable access to its facilities if they can't compete without it.
The appeals court also said Verizon may have leveraged its market power in violation of competition laws.
But in Tuesday's opinion, written by Justice Antonin Scalia, the Supreme Court rejected both those arguments.
In addition, Scalia wrote, plaintiffs could not make additional antitrust claims based on alleged violations of the network-sharing requirements in the 1996 Telecommunications Act.
To the contrary, the 1996 regulations imposed on Verizon mean that there is little need for the kind of antitrust enforcement sought by the plaintiffs, said Scalia.
Under the 1996 Telecommunications Act, Verizon and other big local carriers must make their networks available to rivals in exchange for gaining access to the lucrative long-distance voice and data markets.
The 1996 act "is in an important respect much more ambitious than the antitrust laws" because it seeks to eliminate telephone monopolies, Scalia said.
"The (antitrust law) is indeed the Magna Carta of free enterprise, but it does not give judges carte blanche to insist that a monopolist alter its way of doing business whenever some other approach might yield greater competition," he wrote.
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