Traditionally, plaintiffs asserting claims under Sections 1 and 2 of the Sherman Act allege the existence of one or more product markets relevant to the defendants’ anticompetitive conduct and the defendants’ shares of those markets in order to state a plausible claim of defendants’ market power and/or monopoly power in a product market. But plaintiffs can also convince courts they can proceed to trial by alleging “direct evidence” of defendants’ market power. As we previously reported, Judge Garaufis of the Eastern District of New York denied American Express’s motion for summary judgment in a Section 1 case because the DOJ created a triable issue of fact with its direct evidence approach.

Last week in the pharmaceutical “product hopping” case of In re: Suboxone Antitrust Litigation, the Eastern District of Pennsylvania court denied the Reckitt defendants’ motion to dismiss the plaintiffs’ Section 2 monopolization claims for similar reasons (see our most recent post regarding this case here). Reckitt argued that the plaintiffs failed to sufficiently allege market power because they did not appropriately define the relevant product market. The plaintiffs, however, had alleged there was direct evidence of Reckitt’s monopoly power, including: (1) Reckitt’s successful impairment and exclusion of generic competition; (2) supra-competitive prices resulting from Reckitt’s conduct; and (3) the inability of a competitor to increase output of competing goods in response to Reckitt’s supra-competitive prices. The court agreed that these allegations were sufficient as plausible allegations of monopoly power. The court noted disagreement among courts over what level of precision is required for the relevant market definition when plaintiffs rely on direct evidence of market power–or whether the relevant market needs to be defined at all–but did not reach the question of whether a plaintiff must define a relevant market in a direct evidence case. Instead, the court concluded the plaintiffs had in fact identified a relevant market, assuming that allegation was even necessary.

The viability of direct evidence at the motion to dismiss and summary judgment stages seems to be winning court approval in well-pleaded cases. But the need to allege a relevant product market remains fair grounds for litigation.