Tying: The Poster Child for Antitrust Modernization

Abstract:     
U.S. antitrust law has made enormous strides in the last twenty years towards becoming intellectually coherent and based on sound economic analysis. Economic analysis now has a preeminent place in evaluating and bringing cases, among enforcement agencies and in the courts. There is no serious debate that unilateral practices should be subjected to a per se test rather than a rule of reason analysis. Likewise, there is no debate among economists or legal scholars that tying should be removed from the genus of unilateral practices and placed in its own leper colony.

The time has therefore come to abandon the per se label and refocus the inquiry on the adverse economic effects, and the potential economic benefits, that the tie may have. The law of tie-ins will thus be brought into accord with the law applicable to all other allegedly anticompetitive economic arrangements, except those few horizontal or quasi-horizontal restraints that can be said to have no economic justification whatsoever. This change will rationalize rather than abandon tie - in doctrine as it is already applied. Modern antitrust analysis does not support the per se condemnation of tying or the Jefferson Parish test. Neither should modern antitrust law.

Number of Pages in PDF File: 26

working papers series