Fit to be Tied? Antitrust Implications of Collins Inkjet Co. v. Eastman Kodak Co.
Published by The Brattle Group, Inc.
Purchasers often make a significant upfront investment when they buy durable equipment such as printers and photocopiers. Further, in order to use such equipment, they often need to make aftermarket purchases of products (such as ink) and services (such as repairs) from the original equipment manufacturer (“OEM”) or aftermarket suppliers. The recent opinion issued by the U.S. Court of Appeals for the Sixth Circuit in Collins Inkjet Co. v. Eastman Kodak Co. may have implications for how these aftermarket products and services are priced.
At issue in this case is a practice known as “tying,” which is conditioning the sale of one product (the “tying product”) on the purchase of another (the “tied product”). Firms can tie in a variety of ways. For example, a firm may require customers who purchase one product to make all their purchases of another product from that firm. Alternatively, a firm may condition the price of one product on whether other products are also purchased. Tying is a common practice in the economy. In certain cases, however, tying can have anticompetitive consequences, such as when it excludes a competitor from the market for the tied product. Accordingly, tying may be challenged under several provisions of the U.S. antitrust laws.
