Law Commons^™

Tying Noncompetitive Goods, Herbert J. Hovenkamp

All Faculty Scholarship

Many of the classic tying cases involved tied products that were common staples such as button fasteners, canned ink, dry ice, or salt. These products were sold in competitive markets, presumably at prices very close to cost. For most of them the most likely explanations for the tie were quality control or price discrimination, both with competitively benign results in the great majority of situations. When the tied good is sold in a noncompetitive market, however, an additional consumer welfare enhancing result is likely to obtain – namely, the elimination of double marginalization, which occurs when separate sellers of complementary …

The Obama Administration And Section Two Of The Sherman Act, Herbert J. Hovenkamp

All Faculty Scholarship

During the administration of President George W. Bush, the Antitrust Division was not enthusiastic about use of §2 of the Sherman Act to pursue anticompetitive single-firm conduct. Indeed, its most prominent contribution on the issue was the Antitrust Division’s §2 Report, which the Obama Antitrust Division withdrew only eight months after it was issued.This withdrawal was entirely in keeping with candidate Obama’s repeated promises to reinvigorate antitrust enforcement.

This essay analyzes the current state of antitrust and makes recommendations concerning structures and practices where increased §2 enforcement is warranted and those where it is not. Wise use of enforcement dollars …

Tying Arrangements And Antitrust Harm, Erik Hovenkamp, Herbert J. Hovenkamp

All Faculty Scholarship

A tying arrangement is a seller’s requirement that a customer may purchase its “tying” product only by taking its “tied” product. In a variable proportion tie the purchaser can vary the amount of the tied product. For example, a customer might purchase a single printer, but either a contract or technological design requires the purchase of varying numbers of printer cartridges from the same manufacturer.

Such arrangements are widely considered to be price discrimination devices, but their economic effects have been controversial. Tying has been attacked on the theory that price discrimination of this sort reduces consumer welfare. We show …