Tying as Quality Control: A Legal and Economic Analysis

Abstract

Abstract This article identifies three shortcomings in the relevant literature and cases concerning the use of tying to protect the tying good'�s reputation for quality from the damaging effects of inferior tied goods, where the tying and tied goods are used in conjunction with one another (for example, machines and aftermarket service). First, it is the buyer, not independent sellers of tied goods as cases and commentary suggest, who imposes costs on the seller of the tying good by using independently supplied tied goods the buyer anticipates to be of inferior quality. Second, even where there is customer confusion about the source of poor (or good) performance ex post, using inferior tied goods may not harm, and indeed may enhance, the tying good'�s reputation. Third, there is a tendency to elide distinct quality‐control explanations of tying. The article discusses these shortcomings and their legal implications.