8. Commercial practices deserve to be treated as illegal in themselves if “their harmful effect on competition and the absence of any redemptive virtue are conclusively considered inappropriate”. N. Pac. Ry., 356 U.S. at 5. Coercion Under EU law, as well as US law, the coercion to buy two products together is a key element in establishing abusive links. Coercion can take many forms. Coercion is clearly exercised when the dominant enterprise makes the sale of one asset an absolute condition of another asset. This condition may be explicit in an agreement (see e.B. Tetra Pak II) or de facto (see e.B.
HUH). But even lesser forms of coercion, such as price incentives or withdrawal of services, may suffice if they are so strong that customers would not choose to buy products individually. One example is Hilti`s refusal to provide warranties when customers have used third-party nails in their Hilti weapons. Some tying agreements are illegal in the United States under the Sherman Antitrust Act[2] and section 3 of the Clayton Act. [3] A tied selling agreement is defined as “an agreement by a party to sell a product, but only on the condition that the buyer also purchases another (or related) product, or at least accepts that he does not buy the product from another supplier.” [4] Liaison can be both the action of several companies and the work of a single company. The success of a claim generally requires proof of four elements: (1) they are two separate goods or services; (2) The purchase of the binding product depends on the additional purchase of the linked product; 3. the seller has sufficient market power on the market for the tying product; (4) a significant part of intergovernmental trade in the related products market is affected. [5] In the early cases, the links concerned products that were intuitively separated, such as terrestrial and transport services22 or projectors and films23, and, as the Court of Appeal pointed out in Microsoft III, “[t]he requirement that a practice must include two separate products before being condemned as an illegal link blocked as a purely linguistic requirement: if the products are not separated, one cannot be “linked” to the other. » 24 2. THE PER SE ILLEGAL APPROACH IN CONTEXT According to the Per se illegality approach, the courts have accepted that some form of economic or market power is a necessary condition for harmful links.
In view of their assumption that tying did not have redemptive characteristics, they did not examine whether market power was also a sufficient condition. Nor did they seem to have realised that tying was a pervasive phenomenon among firms with little or no market power and therefore had to serve a `purpose beyond the suppression of competition`. 34 Determining the correct legal standard depends on previous beliefs about the prevalence of harmful links and the ability of courts to separate harmful links from beneficial commitments.166 Do we believe that liaison is generally effective? Do we believe that the courts can make decisions with a high degree of accuracy? Illegal regulation in itself is best suited if it is considered that the link is often harmful and that the courts cannot precisely separate harmful obligations from beneficial obligations. In this case, it is better to condemn all links than to risk approving many harmful links just to save a few useful links. A legal regulation in itself is best suited if not. Letting a few harmful obligations pass is a small price to pay so that companies can make beneficial connections without risking a false conviction. Between these two extremes, there is a shift from a change in illegality per se (Jefferson Parish), to the rule of reason (Microsoft III), to the modified legal rule itself (Hylton-Salinger).167 Among the legal agreements modified per se, tied selling agreements would be considered legal unless there is strong evidence that there are significant anti-competitive effects that outweigh the pro-competitive effects. Cases of technological ties in the United States appear to follow this approach.168 In Jefferson Parish, a 30% market share led the court to conclude that the defendant did not have the necessary market power.46 Thus, the hospital itself escaped illegality. However, the establishment of “separate products” is not enough. A key element of the link “is the forced purchase of a second stand-alone product”; 27 In other words, what distinguishes the illegal link from legal tied selling is `the exploitation of the seller`s control over the tying product in order to compel the buyer to purchase a tied product that the buyer did not want at all or might have preferred to buy elsewhere on other terms`. 28 Where the purchaser has the possibility of purchasing products individually or in batches and the possibility of purchasing individual products is economically justifiable, there is no binding nature. The modified approach itself under Jefferson Parish and Kodak significantly raised the standard for illegal linking and reduced the risk of false positives.
Nevertheless, it was essentially an approach in itself. It did not examine the effects of individual tying agreements in the circumstances of a particular case. In addition, it considered that the competitive harm of tying agreements is, on average, greater than their efficiency gains, at least if the tying criteria were met. A closer examination of when this assumption is likely to continue is warranted. In Jefferson Parish,37 four judges sought to take an approach to the rule of reason.38 Five judges joined forces to form an approach that maintained the ban per se, but made some significant nods in recognition of efficiency gains. The majority view seems to have been influenced by respect for precedents rather than by the belief that a ban in itself is the most appropriate way to deal with binding agreements. The Jefferson Parish case concerned the liaison of hospital and anesthesiology services. In 1977, Edwin Hyde, an anesthesiologist, applied to be admitted to the medical staff at East Jefferson Hospital. The hospital rejected the application because it had entered into an agreement with Roux & Associates (Roux), a professional medical company, to provide all of the hospital`s anesthesiological services.
Dr. Hyde then sued East Jefferson Hospital under Section 1 of the Sherman Act, among other things, and sought an injunction to force its admission to medical staff. The decisions of the various courts that examined this regime revolved around the question of whether the hospital had market power. The Supreme Court and the Court of First Instance concluded that this was not the case, but the Supreme Court seized this case as an opportunity to reconsider the approach itself. Loyalty (informal product engagement) is the practice of selling a product or service as a mandatory complement to the purchase of another product or service. From a legal point of view, a sale of ty makes the sale of a good (binding) to the customer (or de jure customer) dependent on the purchase of a second distinctive character (the related goods). Binding is often illegal if the products are not naturally linked. It`s related, but different from free marketing, a common (and legal) way to donate an item (or sell it at a significant discount) to ensure a continuous flow of selling another related item. (a) Market power Although tying was generally considered under section 1 and not section 2 of the Sherman Act,15,15 a certain degree of market power of the seller in the tying market was systematically one of the conditions of illegal tying. However, the seller`s market power must not constitute monopoly power within the meaning of section 2 of the Sherman Act. According to the Supreme Court, the relevant question was whether “a party has sufficient economic power with respect to the binding product to substantially restrict free competition in the market for the tied product”. 16 A tying contract is a contract in which a product is sold or leased only on the condition that the buyer purchases another product or service from the seller or lessor.
A common type of bonding, known as full line forcing, is when a seller forces the buyer to take an entire product line from the seller. That is, the buyer can not only buy a product in the line. Another situation is to bind non-patented products to a patented product. Such practices are in themselves illegal if the following are present: exclusion from trade – the tied selling agreement prevents a significant part of the negotiation on the relevant market; Linking Apple products is an example of business links that have sparked controversy lately. .
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