Tying Overview • Tying may be challenged under §1 or §2 of the Sherman Act or §3 of the Clayton Act o Note b §3 of the Clayton Act does not apply to services (like advertising)…therefore tying in service markets must be evaluated under the Sherman Act (see Times Picayune ) • “Tying ” – the sale or lease of one product (the “tying” product) on the condition that the buyer or lessee take a second product (the “tied” product) as well Per Se Rule in Name Only • Early view b tying serves “hardly any purpose other than to suppress competition” – Northern Pacific RR (1958) o Theory (wrong) b a monopoly in one market would lead to a monopoly in another mkt s Why it is wrong b a monopolist would have already maximized profits in the tying market…and 2 monopolies are not necessarily better than one o Northern Pacific RR adopted a per se rule w/ respect to tie-ins • Current view b a tying arrangement is still per se illegal – Jefferson Parrish o Majority (J. Stevens)
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This note was uploaded on 02/14/2008 for the course LAW 7557 taught by Professor Crane during the Fall '07 term at Yeshiva.