AAI Urges Tenth Circuit to Sacrifice Profit Test (Novell v. Microsoft)

The AAI filed an amicus brief urging the 10th Circuit to grant rehearing en banc to correct a panel decision holding that short-term “profit sacrifice” is an essential element of a refusal to deal claim. The panel upheld the dismissal of a monopolization complaint brought by Novell against Microsoft involving the withdrawal of certain applications programming interfaces (APIs) in the 1990s, which was allegedly directed against WordPerfect in order to maintain Microsoft’s operating systems monopoly. The panel reasoned that the purpose and effect of Microsoft’s conduct in the operating systems market was irrelevant because the conduct was profitable in the applications market and profitable overall, even if there otherwise was no legitimate business justification. The AAI’s brief argues that a refusal-to-deal claim does not require proof of profit sacrifice and that panel also erred by confusing profitability with efficiency.

The AAI’s brief was written by Rick Brunell, with assistance from Randy Stutz and Sandeep Vaheesan.