Franchise Tying Suits after Kodak

One vertical control device that has been used by franchisors is the tying contract. In a franchise contract, a tying contract is an agreement whereby the franchisor will license the franchisee on the condition that the franchisee buy other products from the franchiser. Although Eastman Kodak Compan...

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Bibliographic Details
Published in:Journal of public policy & marketing 1995-04, Vol.14 (1), p.149-154
Main Authors: Blair, Roger D., Herndon, Jill Boylston
Format: Article
Language:English
Subjects:
Antitrust
Clayton Antitrust Act 1914-US
Competition
Contracts
Corporations
Economic competition
Federal court decisions
Foreclosure
Franchise agreements
Franchisees
Franchising
Legal Developments
Lower courts
Market power
OEM
Repair & maintenance
Rule of reason
Supreme Court decisions
Trademarks
Tying arrangements
Tying contracts
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Summary:One vertical control device that has been used by franchisors is the tying contract. In a franchise contract, a tying contract is an agreement whereby the franchisor will license the franchisee on the condition that the franchisee buy other products from the franchiser. Although Eastman Kodak Company v. Image Technical products (1992) was not a franchise tying case, the Supreme Court's decision provided both a progress report on the Court's attitude toward tying arrangements and some guidance on the standards of illegality. The Kodak case has direct relevance for 2 of the 5 elements of an illegal tying contract: 1. the existence of separate products, and 2, the existence of market power in the tying good. The antitrust concerns regarding tying arrangements, conditions for an illegal tying arrangement in a franchise contract, and the Kodak decision are reviewed.
ISSN:0743-9156
1547-7207