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Tying: A Comprehensive Guide to Its Legal Definition and Impact
Definition & Meaning
Tying refers to a business practice where a seller requires a buyer to purchase a second product (the tied product) as a condition of buying a primary product (the tying product). This arrangement raises antitrust concerns, particularly when the seller has significant market power over the tying product, allowing them to compel buyers to acquire the tied product even if they would not have chosen to do so otherwise.
Table of content
Legal Use & context
Tying arrangements are primarily addressed in antitrust law, which aims to promote fair competition and prevent monopolistic practices. Legal professionals may encounter tying in various contexts, including:
Commercial transactions
Competition law cases
Regulatory compliance
Users can manage some aspects of tying arrangements through legal templates and forms available on platforms like US Legal Forms, especially if they are involved in business transactions that may raise antitrust issues.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A software company sells a popular operating system but requires customers to also buy its office suite software. This could be seen as a tying arrangement if the company has significant market power in the operating system market.
Example 2: A car manufacturer offers a discount on a vehicle but only if the buyer also purchases an extended warranty from them. This may constitute tying if the manufacturer dominates the vehicle market. (hypothetical example)