Legal Definitions - tying

Tying

Tying refers to a business practice where a seller makes the sale of one product or service (known as the tying product) conditional upon the buyer also purchasing a different, separate product or service (known as the tied product) from the same seller. This arrangement can raise concerns under antitrust laws if it unfairly limits competition or forces consumers to buy products they do not want or need.

Here are some examples to illustrate this concept:

• Example 1: Software Bundling

  A major technology company sells a widely used operating system for computers. However, they design the system so that users can only install and use their proprietary web browser, making it impossible to install or effectively use competing browsers. To get the essential operating system (the tying product), customers are forced to accept and use the company's browser (the tied product).

  This illustrates tying because access to the desirable operating system is conditioned on the acceptance and use of the company's specific browser, limiting consumer choice and potentially stifling competition in the web browser market.

• Example 2: Specialized Equipment and Maintenance

  A manufacturer produces highly specialized industrial machinery that is critical for a particular industry. When businesses purchase this machinery (the tying product), the manufacturer requires them to also sign an exclusive, multi-year maintenance and repair contract directly with the manufacturer (the tied product). Customers are not allowed to use independent service providers for maintenance or repairs without voiding their warranty or losing access to essential software updates.

  This is an example of tying because the manufacturer leverages the demand for its unique machinery to force customers into purchasing its maintenance services, potentially preventing independent service companies from competing.

• Example 3: Event Tickets and Merchandise

  A popular music artist announces a highly anticipated concert tour, with tickets selling out almost instantly. To purchase a ticket for a specific show (the tying product), fans are directed to a special online portal where they are required to add a "fan bundle" to their cart, which includes an exclusive t-shirt and a digital album download (the tied products). There is no option to purchase the ticket separately.

  This demonstrates tying because the artist is using the high demand for concert tickets to compel fans to buy additional merchandise they might not otherwise want, effectively bundling two separate purchases together.