Questions
This page is for any questions about the reading or class discussion
Class 1 - Introduction
Class 2 - Enforcement and Monopolization
Class 3 - The Modern Offense of Monopolization
Class 4 - Monopoly Conduct
Question 1
I'm still stuck on how embedding service in with United Shoe's leases was anti-competitive. I get that the lease was, but what is inherently anti-competitive to other shoe machinery sellers about offering a service with your lease? After all the lease was the industry standard since the civil war. I do get that this clause limited a third party service industry, but I don't understand how it was anti-competitive with regard to other shoe machinery manufacturers.
Answer 1
Consider it as a matter of barriers to entry: What do you need to gather to start selling shoe machinery? If the 70-80% market leader offers only "leases with service included," customers can't price the service separately, and independent service organizations can't easily develop (with max 30% of the shoe machines to service). To get started, the would-be competitor must be able to offer both machines and service.
Class 5 - Monopoly Conduct II
Comment
In the notes after Trinko, the supplement mentions a case Evic Class Action Litigation. The book says that the case "held that UPS's software for tracing packages could be an essential facility that must be shared with rivals." Defendant, UPS, had brought a motion to dismiss. The court found that the plaintiff class, sellers of shipping insurance, had alleged sufficient facts relating to the use of UPS facilities for selling insurance as essential facilities to survive a demurrer. The court did not hold, as the text implies, that UPS would have to allow FedEx to use UPS's tracking software.
Comment
Wikipedia Entry on Bundling (Tying) http://en.wikipedia.org/wiki/Product_tying
Outside of Class
The Economist has an excellent cartoon on the Delta-Northwest merger that we discussed in class: http://www.economist.com/daily/kallery/displaystory.cfm?story_id=11072063