In recent years, developments in business practices related to new technologies have tested the legality of related agreements. While the Supreme Court still considers some tied selling agreements to be illegal per se, it actually uses a rule of reason analysis, which requires a foreclosure analysis and a positive defence of effectiveness justifications. [9] The guidelines on Article 102 of the enforcement priorities set out the circumstances in which measures against tying should be taken. First, it must be determined whether the accused undertaking holds a dominant position on the market for tied or tied products[31]. The next step is to determine whether the dominant undertaking has linked two different products. This is important because two identical products cannot be considered bound under Article 102(2)(d) of the EC Treaty, which states that products are deemed to be bound if they are unrelated `by reason of their nature or commercial use`. This leads to problems in the legal definition of what amounts to a constraint in the scenarios of selling cars with tires or selling a car with a radio. The Commission therefore provides guidance in this regard, relying on the Microsoft judgment[32], according to which „two products are different if, in the absence of tying or bundling, a significant number of customers would buy or would have purchased the tying product without also purchasing the tied product from the same supplier, thus allowing autonomous production for both the tying product and the tied product“[33]. The next question is whether the customer was obliged to purchase both the tying product and the tied product, as suggested by Article 102(2)(d): `make the conclusion of contracts subject to the acceptance of additional commitments by the other parties`. In situations of contractual agreement, it is clear that the criterion is met[34]; for an example of non-contractual tied selling, see Microsoft[35]. To consider a company anti-competitive, it is also necessary to know whether the link can have a crowding-out effect. [36] Some examples of tying with anti-competitive foreclosure effects in case law are IBM[37] , Eurofix-Bauco v Hilti[38] , Telemarketing v CLT[39] , British Sugar[40] and Microsoft[41].
Subsequently, the dominant undertaking may argue that it can demonstrate that tying is objectively justified or increases efficiency, and the Commission is prepared to examine claims that tying may lead to economic efficiency of production or distribution for the benefit of consumers. [42] Banks can take steps to protect their loans and preserve the value of their investments, such as guarantees or guarantees from borrowers. The law exempts so-called „traditional“ banking practices from their illegality per se and therefore aims not so much to restrict banks` lending practices, but rather to ensure that the practices used are fair and competitive. Most applications under the BHCA are denied. Banks still have some leeway in drafting loan agreements, but if a bank clearly exceeds the bounds of decency, the plaintiff will be compensated with triple damages. Tying (informal, product-related) 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, the combined sale makes the sale of a product (the linked goods) subject to the actual customer (or de jure customer) to the purchase of a second distinctive character (the tied product). Binding is often illegal if the products are not naturally bound. It`s related, but different from, free marketing, a common (and legal) method of donating an item (or selling it at a significant discount) to ensure a steady stream of sales of another related item. If a tying agreement is illegal, it may be unlawful in itself or illegal in accordance with the principle of common sense. The conditions for an infringement per se are: the forced purchase of goods in order to obtain a desired separate good or service; the seller`s possession of sufficient economic power over the tying product to restrict free trade in the tied product market; and that the arrangement affects a significant share of trade in the tied product market. If the conditions for an infringement per se are not met, a tying agreement may, in accordance with the common sense principle, be unlawful if: it results in an unreasonable restriction of trade in the relevant market under section 1 of the Sherman Act; or its likely effect is a significant restriction of competition on the relevant market within the meaning of section 3 of the Clayton Act.
Binding law is changing. While the Supreme Court has historically ruled that certain relationships are inherently illegal, lower courts have begun to apply the more flexible „rule of reason“ to assess the competitive impact of tied selling. Cases deal with certain issues, but the general rule is that tying of products raises antitrust issues if it restricts competition without bringing benefits to consumers. Some tied selling agreements are illegal in the United States under the Sherman Antitrust Act[2] and Section 3 of the Clayton Act. [3] Tying is defined as „an agreement by one party to sell a product, but only on the condition that the buyer also purchases another product (or tied product), or at least agrees not to purchase the product from another supplier.“ [4] Tying can be both the act of several companies and the work of a single business. The success of a linked application usually requires proof of four elements: (1) they are two separate goods or services; 2. The purchase of the tying product shall be subject to the additional purchase of the tied product; (3) the seller has sufficient market power for the binding product; (4) A significant part of inter-State trade in linked products on the market is affected. [5] Another high-profile tied selling case was United States v. Microsoft. [18] According to some reports, Microsoft connects Microsoft Windows, Internet Explorer, Windows Media Player, Outlook Express, and Microsoft Office.
The United States alleged that the combination of Internet Explorer (IE) with the sale of Windows 98, which made IE difficult to remove from Windows 98 (for example, not on the „remove programs“ list), and the design of Windows 98 to work „unpleasantly“ with Netscape Navigator, constituted an illegal connection between Windows 98 and IE. [19] Microsoft`s counter-argument was that a web browser and an e-mail reader were simply part of an operating system included in other PC operating systems and that the integration of the products was technologically justified. Just as the definition of a car has changed to include things that were previously separate products, such as speedometers and radios, Microsoft has claimed that the definition of an operating system has changed to include their previously separate products. The U.S. Court of Appeals for the District of Columbia Circuit rejected Microsoft`s claim that Internet Explorer was just one facet of its operating system, but the court ruled that the connection between Windows and Internet Explorer must be respectfully analyzed according to the rule of reason. [18] The U.S. government`s claim was settled prior to final resolution. Apple`s product association is an example of commercial tying that has recently sparked controversy.
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