Antitrust: Tying Arrangements

Tying Arrangements

A tying arrangement is an agreement by a vendor to only sell a product or service to a person if that person agrees to also purchase a different product or service from the vendor.

In order for such a tying arrangement to violate the antitrust laws, it must be proven that the vendor will derive income from the sale of both products or services and that he possesses sufficient market power to restrain competition.

The most typical example of a tying arrangement is that of a “list/back” agreement. This occurs where a builder who also holds a broker’s license or owns a brokerage firm will only agree to build a home for a buyer if he agrees to list his existing home with the builder’s brokerage firm.

Whether such list/back agreements constitute a tying arrangement in violation of the antitrust law usually depends upon whether the builder/broker possesses sufficient market power in the area to restrain competition.