A PYMNTS Company

Antitrust and Nonexcluding Ties

 |  December 20, 2012

Herbert Hovenkamp, Dec 20, 2012

Notwithstanding hundreds of court decisions and scholarly articles, tying arrangements remain enigmatic. Conclusions that go to either extreme, per se legality or per se illegality, invariably make simplifying assumptions that frequently do not obtain. For example, by ignoring double marginalization or tying product price cuts it becomes very easy to prove that a wide-range of ties are anticompetitive. At the other extreme, by ignoring foreclosure possibilities one can readily conclude that ties are invariably benign. Even when one considers consumer welfare alone, the great majority of ties very likely are competitively benign, with a few exceptions that involve realistic threats of anticompetitive foreclosure.

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