Eastman Kodak Co. v. Image Technical Services, Inc.
504 U.S. 451, 112 S.Ct. 2072
U.S.Cal.,1992.

Justice BLACKMUN delivered the opinion of the Court.

[1] Because this case comes to us on petitioner Kodak's motion for summary judg**2077 ment, “[t]he evidence of [respondents] is to be believed, and all justifiable inferences are to be drawn in [their] favor.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1986); Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). Mindful that respondents' version of any disputed issue of fact thus is presumed correct, we begin with the factual basis of respondents' claims. See Arizona v. Maricopa County Medical Society, 457 U.S. 332, 339, 102 S.Ct. 2466, 2470, 73 L.Ed.2d 48 (1982).

FN1. Kodak's micrographic equipment includes four different product areas. The first is capture products such as microfilmers and electronic scanners, which compact an image and capture it on microfilm. The second is equipment such as microfilm viewers and viewer/printers. This equipment is used to retrieve the images. The third is Computer Output Microform (COM) recorders, which are data-processing peripherals that record computer-generated data onto microfilm. The fourth is Computer Assisted Retrieval (CAR) systems, which utilize computers to locate and retrieve micrographic images. See App. 156-158.

FN2. In addition to the OEM's, other sources of Kodak parts include (1) brokers who would buy parts from Kodak, or strip used Kodak equipment to obtain the useful parts and resell them, (2) customers who buy parts from Kodak and make them available to ISO's, and (3) used equipment to be stripped for parts. See id., at 419, 517; Brief for Petitioner 38.

FN3. Section 1 of the Sherman Act states in relevant part: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.” 15 U.S.C. § 1 (1988 ed., Supp. II).

Section 2 of the Sherman Act states: “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.” 15 U.S.C. § 2 (1988 ed., Supp. II).

FN4. Specifically, the Court of Appeals explained that the District Court had denied the request for further discovery made by respondents in their opposition to Kodak's summary judgment motion: “For example, [respondents] requested to depose two ISO customers who allegedly would not sign accurate statements concerning Kodak's market power in the parts market. Not finding it necessary to reach the market power issue in its decision, the district court, of course, had no reason to grant this request.” 903 F.2d, at 617, n. 4.

[2] A tying arrangement is “an agreement by a party to sell one product but only on the condition that the buyer also purchases a different (or tied) product, or at least agrees that he will not purchase that product from any other supplier.” *462 Northern Pacific R. Co. v. United States, 356 U.S. 1, 5-6, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 1958). Such an arrangement violates § 1 of the Sherman Act if the seller has “appreciable economic power” in the tying product market and if the arrangement affects a substantial volume of commerce in the tied market. Fortner Enterprises, Inc. v. United States Steel Corp., 394 U.S. 495, 503, 89 S.Ct. 1252, 1258, 22 L.Ed.2d 495 (1969).

[3] [4] For service and parts to be considered two distinct products, there must be sufficient consumer demand so that it is efficient for a firm to provide service separately from parts. Jefferson Parish Hospital Dist. No. 2 v. Hyde, 466 U.S. 2, 21-22, 104 S.Ct. 1551, 1563, 80 L.Ed.2d 2 (1984). Evidence in the record indicates that service and parts have been sold separately in the past and still are sold separately to self-service equipment owners.^FN5 Indeed, the development of the entire high-technology service industry is evidence of the efficiency of a separate market for service. ^FN6

FN5. The Court of Appeals found: “Kodak's policy of allowing customers to purchase parts on condition that they agree to service their own machines suggests that the demand for parts can be separated from the demand for service.” Id., at 616.

FN6. Amicus briefs filed by various service organizations attest to the magnitude of the service business. See, e.g., Brief for Computer Service Network International as Amicus Curiae; Brief for National Electronics Sales and Service Dealers Association as Amicus Curiae; Brief for California State Electronics Association et al. as Amici Curiae; Brief for National Office Machine Dealers et al. as Amici Curiae.

FN7. The dissent suggests that parts and service are not separate products for tying purposes because all service may involve installation of parts. Post, at 2097, n. 2. Because the record does not support this factual assertion, under the approach of both the Court and the concurrence in Jefferson Parish Hospital Dist. No. 2 v. Hyde, 466 U.S. 2, 104 S.Ct. 1551, 80 L.Ed.2d 2 (1984), Kodak is not entitled to summary judgment on whether parts and service are distinct markets.

FN8. In a footnote, Kodak contends that this practice is only a unilateral refusal to deal, which does not violate the antitrust laws. See Brief for Petitioner 15, n. 4. Assuming, arguendo, that Kodak's refusal to sell parts to any company providing service can be characterized as a unilateral refusal to deal, its alleged sale of parts to third parties on condition that they buy service from Kodak is not. See 903 F.2d, at 619.

[5] [6] Having found sufficient evidence of a tying arrangement, we consider the other necessary feature of an illegal tying arrangement: appreciable economic power in the tying market. Market power is the power “to force a purchaser to do something that he would not do in a competitive market.” Jefferson Parish, 466 U.S., at 14, 104 S.Ct., at 1559.^FN9 It has been defined as “the ability of **2081 a single seller to raise price and restrict output.” Fortner, 394 U.S., at 503, 89 S.Ct., at 1259; United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 391, 76 S.Ct. 994, 1005, 100 L.Ed. 1264 (1956). The existence of such power ordinarily is inferred from the seller's possession of a predominant share of the market. Jefferson Parish, 466 U.S., at 17, 104 S.Ct., at 1561; United States v. Grinnell Corp., 384 U.S. 563, 571, 86 S.Ct. 1698, 1704, 16 L.Ed.2d 778 (1966); Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 611-613, 73 S.Ct. 872, 881-883, 97 L.Ed. 1277 (1953).

FN9. “[T]he essential characteristic of an invalid tying arrangement lies in the seller's exploitation of its control over the tying product to force the buyer into the purchase of a tied product that the buyer either did not want at all, or might have preferred to purchase elsewhere on different terms. When such ‘forcing’ is present, competition on the merits in the market for the tied item is restrained and the Sherman Act is violated.” Jefferson Parish, 466 U.S., at 12, 104 S.Ct., at 1558.

[7] Respondents contend that Kodak has more than sufficient power in the parts market to force unwanted purchases of the tied market, service. Respondents provide evidence that certain parts are available exclusively through Kodak. Respondents also assert that Kodak has control over the availability of parts it does not manufacture. According to respondents' evidence, Kodak has prohibited independent manufacturers from selling Kodak parts to ISO's, pressured Kodak equipment owners and independent parts distributors to deny ISO's the purchase of Kodak parts, and taken steps to restrict the availability of used machines.

[8] Kodak counters that even if it concedes monopoly share of the relevant parts market, it cannot actually exercise the necessary market power for a Sherman Act violation. This is so, according to Kodak, because competition exists in the equipment market.^FN10 Kodak argues that it could not have *466 the ability to raise prices of service and parts above the level that would be charged in a competitive market because any increase in profits from a higher price in the aftermarkets at least would be offset by a corresponding loss in profits from lower equipment sales **2082 as consumers began purchasing equipment with more attractive service costs.

FN10. In their brief and at oral argument, respondents argued that Kodak's market share figures for high-volume copy machines, CAR, and micrographic-capture equipment demonstrate Kodak's market power in the equipment market. Brief for Respondents 16-18, 32-33; Tr. of Oral Arg. 28-31.

In the Court of Appeals, however, respondents did not contest Kodak's assertion that its market shares indicated a competitive equipment market. The Court of Appeals believed that respondents “do not dispute Kodak's assertion that it lacks market power in the [equipment] markets.” 903 F.2d, at 616, n. 3. Nor did respondents question Kodak's asserted lack of market power in their brief in opposition to the petition for certiorari, although they acknowledged that Kodak's entire case rested on its understanding that respondents were not disputing the existence of competition in the equipment market. Brief in Opposition 8.

Recognizing that on summary judgment we may examine the record de novo without relying on the lower courts' understanding, United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962), respondents now ask us to decline to reach the merits of the questions presented in the petition, and instead to affirm the Ninth Circuit's judgment based on the factual dispute over market power in the equipment market. We decline respondents' invitation. We stated in Oklahoma City v. Tuttle, 471 U.S. 808, 816, 105 S.Ct. 2427, 2432, 85 L.Ed.2d 791 (1985): “Our decision to grant certiorari represents a commitment of scarce judicial resources with a view to deciding the merits of one or more of the questions presented in the petition.” Because respondents failed to bring their objections to the premise underlying the questions presented to our attention in their opposition to the petition for certiorari, we decide those questions based on the same premise as the Court of Appeals, namely, that competition exists in the equipment market.

FN11. Kodak argues that such a rule would be per se, with no opportunity for respondents to rebut the conclusion that market power is lacking in the parts market. See Brief for Petitioner 30-31 (“There is nothing that respondents could prove that would overcome Kodak's conceded lack of market power”); id., at 30 (discovery is “pointless” once the “dispositive fact” of lack of market power in the equipment market is conceded); id., at 22 (Kodak's lack of market power in the equipment market “dooms any attempt to extract monopoly profits” even in an allegedly imperfect market); id., at 25 (it is “impossible” for Kodak to make more total profit by overcharging its existing customers for service).

As an apparent second-best alternative, Kodak suggests elsewhere in its brief that the rule would permit a defendant to meet its summary judgment burden under Federal Rule of Civil Procedure 56(c); the burden would then shift to the plaintiffs to “prove ... that there is specific reason to believe that normal economic reasoning does not apply.” Brief for Petitioner 30. This is the United States' position. See Brief for United States as Amicus Curiae 10-11.

[9] Legal presumptions that rest on formalistic distinctions rather than actual market realities are generally disfavored *467 in antitrust law. This Court has preferred to resolve antitrust claims on a case-by-case basis, focusing on the “particular facts disclosed by the record.” Maple Flooring Manufacturers Assn. v. United States, 268 U.S. 563, 579, 45 S.Ct. 578, 583, 69 L.Ed. 1093 (1925); Du Pont, 351 U.S., at 395, n. 22, 76 S.Ct., at 1007, n. 22; Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 70, 97 S.Ct. 2549, 2568, 53 L.Ed.2d 568 (1977) (WHITE, J., concurring in judgment). ^FN12 In determining the existence of market power, and specifically the “responsiveness of the sales of one product to price changes of the other,” Du Pont, 351 U.S., at 400, 76 S.Ct., at 1010; see also id., at 394-395, and 400-401, 76 S.Ct., at 1007, and 1010, this Court has examined closely the economic reality of the market at issue.^FN13

FN12. See generally Business Electronics Corp. v. Sharp Electronics Corp., 485 U.S. 717, 723-726, 108 S.Ct. 1515, 1519-1521, 99 L.Ed.2d 808 (1988); FTC v. Indiana Federation of Dentists, 476 U.S. 447, 458-459, 106 S.Ct. 2009, 2018, 90 L.Ed.2d 445 (1986); National Collegiate Athletic Assn. v. Board of Regents of Univ. of Okla., 468 U.S. 85, 100-104, 104 S.Ct. 2948, 2959-2962, 82 L.Ed.2d 70 (1984); Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S., at 59, 97 S.Ct., at 2562.

FN13. See, e.g., Jefferson Parish, 466 U.S., at 26-29, 104 S.Ct., at 1565-1567; United States v. Connecticut National Bank, 418 U.S. 656, 661-666, 94 S.Ct. 2788, 2792-2795, 41 L.Ed.2d 1016 (1974); United States v. Grinnell Corp., 384 U.S. 563, 571-576, 86 S.Ct. 1698, 1704-1707, 16 L.Ed.2d 778 (1966); International Boxing Club of New York, Inc. v. United States, 358 U.S. 242, 250-251, 79 S.Ct. 245, 250, 3 L.Ed.2d 270 (1959); see also Jefferson Parish, 466 U.S., at 37, n. 6, 104 S.Ct., at 1555, n. 6 (O'CONNOR, J., concurring) (citing cases and describing the careful consideration the Court gives to the particular facts when determining market power).

FN14. See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (“[S]ummary judgment will not lie ... if the evidence is such that a reasonable jury could return a verdict for the nonmoving party”); Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 768, 104 S.Ct. 1464, 1473, 79 L.Ed.2d 775 (1984) (to survive summary judgment there must be evidence that “reasonably tends to prove” plaintiff's theory); First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 288-289, 88 S.Ct. 1575, 1592, 20 L.Ed.2d 569 (1968) (defendant meets his burden under Rule 56(c) when he “conclusively show[s] that the facts upon which [the plaintiff] relied to support his allegation were not susceptible of the interpretation which he sought to give them”); Eastman Kodak Co. of New York v. Southern Photo Materials Co., 273 U.S. 359, 375, 47 S.Ct. 400, 404, 71 L.Ed. 684 (1927). See also H.L. Hayden Co. of New York, Inc. v. Siemens Medical Systems, Inc., 879 F.2d 1005, 1012 (CA2 1989) (“[O]nly reasonable inferences can be drawn from the evidence in favor of the nonmoving party”) (emphasis in original); Arnold Pontiac-GMC, Inc. v. Budd Baer, Inc., 826 F.2d 1335, 1339 (CA3 1987) ( Matsushita directs us “ ‘to consider whether the inference of conspiracy is reasonable’ ”); Instructional Systems Development Corp. v. Aetna Casualty & Surety Co., 817 F.2d 639, 646 (CA10 1987) (summary judgment not appropriate under Matsushita when defendants “could reasonably have been economically motivated”).

[10] The extent to which one market prevents exploitation of another market depends on the extent to which consumers will change their consumption of one product in response to a price change in another, i.e., the “cross-elasticity of demand.” See Du Pont, 351 U.S., at 400, 76 S.Ct., at 1010; P. Areeda & L. Kaplow, Antitrust Analysis ¶ 342(c) (4th ed. 1988).^FN15 Kodak'sproposed *470 rule rests **2084 on a factual assumption about the cross-elasticity of demand in the equipment and aftermarkets: “If Kodak raised its parts or service prices above competitive levels, potential customers would simply stop buying Kodak equipment. Perhaps Kodak would be able to increase short term profits through such a strategy, but at a devastating cost to its long term interests.” ^FN16 Brief for Petitioner 12. Kodak argues that the Court should accept, as a matter of law, this “basic economic realit[y],” id., at 24, that competition in the equipment market necessarily prevents market power in the aftermarkets.^FN17

FN15. What constrains the defendant's ability to raise prices in the service market is “the elasticity of demand faced by the defendant-the degree to which its sales fall ... as its price rises.” Areeda & Kaplow, p. 576 ¶ 342(c).

Courts usually have considered the relationship between price in one market and demand in another in defining the relevant market. Because market power is often inferred from market share, market definition generally determines the result of the case. Pitofsky, New Definitions of Relevant Market and the Assault on Antitrust, 90 Colum.L.Rev. 1805, 1806-1813 (1990). Kodak chose to focus on market power directly rather than arguing that the relationship between equipment and service and parts is such that the three should be included in the same market definition. Whether considered in the conceptual category of “market definition” or “market power,” the ultimate inquiry is the same-whether competition in the equipment market will significantly restrain power in the service and parts markets.

FN16. The United States as amicus curiae in support of Kodak echoes this argument: “The ISOs' claims are implausible because Kodak lacks market power in the markets for its copier and micrographic equipment. Buyers of such equipment regard an increase in the price of parts or service as an increase in the price of the equipment, and sellers recognize that the revenues from sales of parts and service are attributable to sales of the equipment. In such circumstances, it is not apparent how an equipment manufacturer such as Kodak could exercise power in the aftermarkets for parts and service.” Brief for United States as Amicus Curiae 8.

FN17. It is clearly true, as the United States claims, that Kodak “cannot set service or parts prices without regard to the impact on the market for equipment.” Id., at 20. The fact that the cross-elasticity of demand is not zero proves nothing; the disputed issue is how much of an impact an increase in parts and service prices has on equipment sales and on Kodak's profits.

FN18. Although Kodak repeatedly relies on Continental T.V. as support for its factual assertion that the equipment market will prevent exploitation of the service and parts markets, the case is inapposite. In Continental T.V., the Court found that a manufacturer's policy restricting the number of retailers that were permitted to sell its product could have a procompetitive effect. See 433 U.S., at 55, 97 S.Ct., at 2560. The Court also noted that any negative effect of exploitation of the intrabrand market (the competition between retailers of the same product) would be checked by competition in the interbrand market (competition over the same generic product) because consumers would substitute a different brand of the same product. Unlike Continental T.V., this case does not concern vertical relationships between parties on different levels of the same distribution chain. In the relevant market, service, Kodak and the ISO's are direct competitors; their relationship is horizontal. The interbrand competition at issue here is competition over the provision of service. Despite petitioner's best effort, repeating the mantra “interbrand competition” does not transform this case into one over an agreement the manufacturer has with its dealers that would fall under the rubric of Continental T.V.

FN19. See Craswell, Tying Requirements in Competitive Markets: The Consumer Protection Issues, 62 B.U.L.Rev. 661, 676 (1982); Beales, Craswell & Salop, The Efficient Regulation of Consumer Information, 24 J.Law & Econ. 491, 509-511 (1981); Jefferson Parish, 466 U.S., at 15, 104 S.Ct., at 1559.

FN20. In addition, of course, in order to price accurately the equipment, a consumer would need initial purchase information such as prices, features, quality, and available warranties for different machinery with different capabilities, and residual value information such as the longevity of product use and its potential resale or trade-in value.

FN21. To inform consumers about Kodak, the competitor must be willing to forgo the opportunity to reap supracompetitive prices in its own service and parts markets. The competitor may anticipate that charging lower service and parts prices and informing consumers about Kodak in the hopes of gaining future equipment sales will cause Kodak to lower the price on its service and parts, canceling any gains in equipment sales to the competitor and leaving both worse off. Thus, in an equipment market with relatively few sellers, competitors may find it more profitable to adopt Kodak's service and parts policy than to inform the consumers. See 2 Areeda & Turner, Antitrust Law ¶ 404b1; App. 177 (Kodak, Xerox, and IBM together have nearly 100% of relevant market).

Even in a market with many sellers, any one competitor may not have sufficient incentive to inform consumers because the increased patronage attributable to the corrected consumer beliefs will be shared among other competitors. Beales, Craswell, & Salop, 24 J.Law & Econ., at 503-504, 506.

FN22. See Salop & Stiglitz, Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion, 44 Rev.Econ.Studies 493 (1977); Salop, Information and Market Structure-Information and Monopolistic Competition, 66 Am.Econ.Rev. 240 (1976); Stigler, The Economics of Information, 69 J.Pol.Econ. 213 (1961).

FN23. A firm can exact leverage whenever other equipment is not a ready substitute. F. Scherer & D. Ross, Industrial Market Structure and Economic Performance 16-17 (3d ed. 1990).

FN24. The dissent disagrees based on its hypothetical case of a tie between equipment and service. “The only thing lacking” to bring this case within the hypothetical case, states the dissent, “is concrete evidence that the restrictive parts policy was ... generally known.” Post, at 2096. But the dissent's “only thing lacking” is the crucial thing lacking-evidence. Whether a tie between parts and service should be treated identically to a tie between equipment and service, as the dissent and Kodak argue, depends on whether the equipment market prevents the exertion of market power in the parts market. Far from being “anomalous,” post, at 2096, requiring Kodak to provide evidence on this factual question is completely consistent with our prior precedent. See, e.g., n. 13, supra.

FN25. Cf. Instructional Systems, 817 F.2d, at 646 (finding the conspiracy reasonable under Matsushita because its goals were in fact achieved).

[11] Nor are we persuaded by Kodak's contention that it is entitled to a legal presumption on the lack of market power because, as in Matsushita, there is a significant risk of deterring procompetitive conduct. Plaintiffs in Matsushita attempted to prove the antitrust conspiracy “through evidence of rebates and other price-cutting activities.” Id., at 594, 106 S.Ct., at 1360. Because cutting prices to increase business is “the very essence of competition,” the Court was concerned that mistaken inferences would be “especially costly” and would “chill the very conduct the antitrust laws are designed to protect.” Ibid. See also Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 763, 104 S.Ct. 1464, 1470, 79 L.Ed.2d 775 (1984) (permitting inference of concerted action would “deter or penalize perfectly legitimate conduct”). But the facts in this case are just the opposite. The alleged conduct-higher service prices and market foreclosure-is facially anticompetitive and exactly the harm that antitrust laws aim to prevent. In this situation, Matsushita does not create any presumption in favor of summary judgment for the defendant.

FN26. It bears repeating that in this case Kodak has never claimed that it is in fact pursuing such a pricing strategy.

FN27. See Jefferson Parish, 466 U.S., at 12, 104 S.Ct., at 1558 (“Buyers often find package sales attractive; a seller's decision to offer such packages can merely be an attempt to compete effectively-conduct that is entirely consistent with the Sherman Act”). See also Yates & DiResta, Software Support and Hardware Maintenance Practices: Tying Considerations, The Computer Lawyer, Vol. 8, No. 6, p. 17 (1991) (describing various service and parts policies that enhance quality and sales but do not violate the antitrust laws).

FN28. Two of the largest consumers of service and parts contend that they are worse off when the equipment manufacturer also controls service and parts. See Brief for State Farm Mutual Automobile Insurance Co. et al. as Amici Curiae; Brief for State of Ohio et al. as Amici Curiae.

FN29. The dissent urges a radical departure in this Court's antitrust law. It argues that because Kodak has only an “inherent” monopoly in parts for its equipment, post, at 2094, the antitrust laws do not apply to its efforts to expand that power into other markets. The dissent's proposal to grant per se immunity to manufacturers competing in the service market would exempt a vast and growing sector of the economy from antitrust laws. Leaving aside the question whether the Court has the authority to make such a policy decision, there is no support for it in our jurisprudence or the evidence in this case.

Even assuming, despite the absence of any proof from the dissent, that all manufacturers possess some inherent market power in the parts market, it is not clear why that should immunize them from the antitrust laws in another market. The Court has held many times that power gained through some natural and legal advantage such as a patent, copyright, or business acumen can give rise to liability if “a seller exploits his dominant position in one market to expand his empire into the next.” Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 611, 73 S.Ct. 872, 882, 97 L.Ed. 1277 (1953); see, e.g., Northern Pacific R. Co. v. United States, 356 U.S. 1, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958); United States v. Paramount Pictures, Inc., 334 U.S. 131, 68 S.Ct. 915, 92 L.Ed. 1260 (1948); Leitch Mfg. Co. v. Barber Co., 302 U.S. 458, 463, 58 S.Ct. 288, 290, 82 L.Ed. 371 (1938). Moreover, on the occasions when the Court has considered tying in derivative aftermarkets by manufacturers, it has not adopted any exception to the usual antitrust analysis, treating derivative aftermarkets as it has every other separate market. See International Salt Co. v. United States, 332 U.S. 392, 68 S.Ct. 12, 92 L.Ed. 20 (1947); International Business Machines Corp. v. United States, 298 U.S. 131, 56 S.Ct. 701, 80 L.Ed. 1085 (1936); United Shoe Machinery Corp. v. United States, 258 U.S. 451, 42 S.Ct. 363, 66 L.Ed. 708 (1922). Our past decisions are reason enough to reject the dissent's proposal. See Patterson v. McLean Credit Union, 491 U.S. 164, 172-173, 109 S.Ct. 2363, 2370, 105 L.Ed.2d 132 (1989) (“Considerations of stare decisis have special force in the area of statutory interpretation, for here, unlike in the context of constitutional interpretation, the legislative power is implicated, and Congress remains free to alter what we have done”).

Nor does the record in this case support the dissent's proposed exemption for aftermarkets. The dissent urges its exemption because the tie here “does not permit the manufacturer to project power over a class of consumers distinct from that which it is already able to exploit (and fully) without the inconvenience of the tie.” Post, at 2099. Beyond the dissent's obvious difficulty in explaining why Kodak would adopt this expensive tying policy if it could achieve the same profits more conveniently through some other means, respondents offer an alternative theory, supported by the record, that suggests Kodak is able to exploit some customers who in the absence of the tie would be protected from increases in parts prices by knowledgeable customers. See supra, at 2086-2087.

At bottom, whatever the ultimate merits of the dissent's theory, at this point it is mere conjecture. Neither Kodak nor the dissent have provided any evidence refuting respondents' theory of forced unwanted purchases at higher prices and price discrimination. While it may be, as the dissent predicts, that the equipment market will prevent any harms to consumers in the aftermarkets, the dissent never makes plain why the Court should accept that theory on faith rather than requiring the usual evidence needed to win a summary judgment motion.

[12] The existence of the first element, possession of monopoly power, is easily resolved. As has been noted, respondents have presented a triable claim that service and parts are separate markets, and that Kodak **2090 has the “power to control prices or exclude competition” in service and parts. Du Pont, 351 U.S., at 391, 76 S.Ct., at 1005. Monopoly power under § 2 requires, of course, something greater than market power under § 1. See Fortner, 394 U.S., at 502, 89 S.Ct., at 1258. Respondents' evidence that Kodak controls nearly 100% of the parts market and 80% to 95% of the service market, with no readily available substitutes, is, however, sufficient to survive summary judgment under the more stringent monopoly standard of § 2. See National Collegiate Athletic Assn. v. Board of Regents of Univ. of Okla., 468 U.S. 85, 112, 104 S.Ct. 2948, 2966, 82 L.Ed.2d 70 (1984). Cf. United States v. Grinnell Corp., 384 U.S., at 571, 86 S.Ct., at 1704 (87% of the market is a monopoly); American Tobacco Co. v. United States, 328 U.S. 781, 797, 66 S.Ct. 1125, 1133, 90 L.Ed. 1575 (1946) (over two-thirds of the market is a monopoly).

[13] [14] Kodak also contends that, as a matter of law, a single brand of a product or service can never be a relevant market under the Sherman Act. We disagree. The relevant market*482 for antitrust purposes is determined by the choices available to Kodak equipment owners. See Jefferson Parish, 466 U.S., at 19, 104 S.Ct., at 1562. Because service and parts for Kodak equipment are not interchangeable with other manufacturers' service and parts, the relevant market from the Kodak equipment owner's perspective is composed of only those companies that service Kodak machines. See Du Pont, 351 U.S., at 404, 76 S.Ct., at 1012 (“The market is composed of products that have reasonable interchangeability”).^FN30 This Court's prior cases support the proposition that in some instances one brand of a product can constitute a separate market. See National Collegiate Athletic Assn., 468 U.S., at 101-102, 111-112, 104 S.Ct., at 2960, 2965; International Boxing Club of New York, Inc. v. United States, 358 U.S. 242, 249-252, 79 S.Ct. 245, 249-251, 3 L.Ed.2d 270 (1959); International Business Machines Corp. v. United States, 298 U.S. 131, 56 S.Ct. 701, 80 L.Ed. 1085 (1936).^FN31 The proper market definition in this case can be determined only after a factual inquiry into the “commercial realities” faced by consumers. United States v. Grinnell Corp., 384 U.S., at 572, 86 S.Ct., at 1704.

FN30. Kodak erroneously contends that this Court in Du Pont rejected the notion that a relevant market could be limited to one brand. Brief for Petitioner 33. The Court simply held in Du Pont that one brand does not necessarily constitute a relevant market if substitutes are available. 351 U.S., at 393, 76 S.Ct., at 1006. See also Boxing Club, 358 U.S., at 249-250, 79 S.Ct., at 250. Here respondents contend there are no substitutes.

FN31. Other courts have limited the market to parts for a particular brand of equipment. See, e.g., International Logistics Group, Ltd. v. Chrysler Corp., 884 F.2d 904, 905, 908 (CA6 1989) (parts for Chrysler cars is the relevant market), cert. denied, 494 U.S. 1066, 110 S.Ct. 1783, 108 L.Ed.2d 784 (1990); Dimidowich v. Bell & Howell, 803 F.2d 1473, 1480-1481, n. 3 (CA9 1986), modified, 810 F.2d 1517 (1987) (service for Bell & Howell equipment is the relevant market); In re General Motors Corp., 99 F.T.C. 464, 554, 584 (1982) (crash parts for General Motors cars is the relevant market); Heatransfer Corp. v. Volkswagenwerk A.G., 553 F.2d 964 (CA5 1977) (air conditioners for Volkswagens is the relevant market), cert. denied, 434 U.S. 1087, 98 S.Ct. 1282, 55 L.Ed.2d 792 (1978).

[15] The second element of a § 2 claim is the use of monopoly power “to foreclose competition, to gain a competitive advantage,*483 or to destroy a competitor.” United States v. Griffith, 334 U.S. 100, 107, 68 S.Ct. 941, 945, 92 L.Ed. 1236 (1948). If Kodak adopted its parts and service policies as part of a scheme of willful acquisition or maintenance of monopoly power, it will have violated § 2. Grinnell Corp., 384 U.S., at 570-571, 86 S.Ct., at 1703-1704; United States v. Aluminum Co. of America, 148 F.2d 416, 432 (CA2 1945); Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 600-605, **2091 105 S.Ct. 2847, 2856-2859, 86 L.Ed.2d 467 (1985). ^FN32

FN32. It is true that as a general matter a firm can refuse to deal with its competitors. But such a right is not absolute; it exists only if there are legitimate competitive reasons for the refusal. See Aspen Skiing Co., 472 U.S., at 602-605, 105 S.Ct., at 2857-2859.

FN33. Kodak claims that both Continental T.V., and Monsanto support its free-rider argument. Neither is applicable. In both Continental T.V., 433 U.S., at 55, 97 S.Ct., at 2560, and Monsanto, 465 U.S., at 762-763, 104 S.Ct., at 1470, the Court accepted free-riding as a justification because without restrictions a manufacturer would not be able to induce competent and aggressive retailers to make the kind of investment of capital and labor necessary to distribute the product. In Continental T.V. the relevant market level was retail sale of televisions and in Monsanto retail sales of herbicides. Some retailers were investing in those markets; others were not, relying, instead, on the investment of the other retailers. To be applicable to this case, the ISO's would have to be relying on Kodak's investment in the service market; that, however, is not Kodak's argument.

Justice SCALIA, with whom Justice O'CONNOR and Justice THOMAS join, dissenting.

*488 For these reasons, as we explained in Jefferson Parish, “the law draws a distinction between the exploitation of market power by merely enhancing the price of the tying product, on the one hand, and by attempting to impose restraints on competition in the market for a tied product, on the other.” 466 U.S., at 14, 104 S.Ct., at 1559.

As to Kodak copiers, Kodak's restrictive parts policy had a broader foundation: Considered in the light most favorable to respondents, see Anderson, supra, 477 U.S., at 255, 106 S.Ct., at 2513 the record suggests that, **2096 from its inception, the policy was applied to new and existing copier customers alike. But at least all post-1985 purchasers of micrographic equipment, like all post-1985 purchasers of new Kodak copiers, could have been aware of Kodak's parts practices. The only thing lacking to bring all of these purchasers (accounting for the vast bulk of the commerce at issue here) squarely within the hypotheticals we have described is concrete evidence that the restrictive parts policy was announced or generally known. Thus, under the Court's approach the existence vel non of such evidence is determinative of the legal standard (the per se rule versus the rule of reason) under which the alleged tie is examined. In my judgment, this makes no sense. It is *493 quite simply anomalous that a manufacturer functioning in a competitive equipment market should be exempt from the per se rule when it bundles equipment with parts and service, but not when it bundles parts with service. This vast difference in the treatment of what will ordinarily be economically similar phenomena is alone enough to call today's decision into question.

FN1. That there exist innumerable parts and service firms in such industries as the automobile industry, see Brief for Automotive Warehouse Distributors Association, et al. as Amici Curiae 2-3, does not detract from this point. The question whether power to control an aftermarket exists is quite distinct from the question whether the power has been exercised. Manufacturers in some markets have no doubt determined that exclusionary intrabrand conduct works to their disadvantage at the competitive interbrand level, but this in no way refutes the self-evident reality that control over unique replacement parts for single-branded goods is ordinarily available to such manufacturers for the taking. It confounds sound analysis to suggest, as respondents do, see Brief for Respondents 5, 37, that the asserted fact that Kodak manufactures only 10% of its replacement parts, and purchases the rest from original equipment manufacturers, casts doubt on Kodak's possession of an inherent advantage in the aftermarkets. It does no such thing, any more than Kodak's contracting with others for the manufacture of all constituent parts included in its original equipment would alone suggest that Kodak lacks power in the interbrand micrographic and photocopying equipment markets. The suggestion implicit in respondents' analysis-that if a seller chooses to contract for the manufacture of its branded merchandise, it must permit the contractors to compete in the sale of that merchandise-is plainly unprecedented.

FN2. Even with interbrand power, I may observe, it is unlikely that Kodak could have incrementally exploited its position through the tie of parts to service alleged here. Most of the “service” at issue is inherently associated with the parts, i.e., that service involved in incorporating the parts into Kodak equipment, and the two items tend to be demanded by customers in fixed proportions (one part with one unit of service necessary to install the part). When that situation obtains, “ ‘no revenue can be derived from setting a higher price for the tied product which could not have been made by setting the optimum price for the tying product.’ ” P. Areeda & L. Kaplow, Antitrust Analysis ¶ 426(a), p. 706 (4th ed. 1988) (quoting Bowman, Tying Arrangements and the Leverage Problem, 67 Yale L.J. 19 (1957)). These observations strongly suggest that Kodak parts and the service involved in installing them should not be treated as distinct products for antitrust tying purposes. See Jefferson Parish Hospital, Dist. No. 2 v. Hyde, 466 U.S. 2, 39, 104 S.Ct. 1551, 1572, 80 L.Ed.2d 2 (1984) (O'CONNOR, J., concurring in judgment) (“For products to be treated as distinct, the tied product must, at a minimum, be one that some consumers might wish to purchase separately without also purchasing the tying product ”) (emphasis in original) (footnote omitted); Ross, The Single Product Issue in Antitrust Tying: A Functional Approach, 23 Emory L.J. 963, 1009-1010 (1974).

FN3. The Court insists that the record in this case suggests otherwise, i.e., that a tie between parts and service somehow does enable Kodak to increase overall monopoly profits. See ante, at 2089, n. 29. Although the Court does not identify the record evidence on which it relies, the suggestion, apparently, is that such a tie facilitates price discrimination between sophisticated, “high-volume” users of Kodak equipment and their unsophisticated counterparts. The sophisticated users (who, the Court presumes, invariably self-service their equipment) are permitted to buy Kodak parts without also purchasing supracompetitively priced Kodak service, while the unsophisticated are-through the imposition of the tie-compelled to buy both. See ante, at 2086-2087.

While superficially appealing, at bottom this explanation lacks coherence. Whether they self-service their equipment or not, rational foremarket consumers (those consumers who are not yet “locked in” to Kodak hardware) will be driven to Kodak's competitors if the price of Kodak equipment, together with the expected cost of aftermarket support, exceeds competitive levels. This will be true no matter how Kodak distributes the total system price among equipment, parts, and service. See supra, at 2097. Thus, as to these consumers, Kodak's lack of interbrand power wholly prevents it from employing a tie between parts and service as a vehicle for price discrimination. Nor does a tie between parts and service offer Kodak incremental exploitative power over those consumers-sophisticated or not-who have the supposed misfortune of being “locked in” to Kodak equipment. If Kodak desired to exploit its circumstantial power over this wretched class by pressing them up to the point where the cost to each consumer of switching equipment brands barely exceeded the cost of retaining Kodak equipment and remaining subject to Kodak's abusive practices, it could plainly do so without the inconvenience of a tie, through supracompetitive parts pricing alone. Since the locked-in sophisticated parts purchaser is as helpless as the locked-in unsophisticated one, I see nothing to be gained by price discrimination in favor of the former. If such price discrimination were desired, however, it would not have to be accomplished indirectly, through a tie of parts to service. Section 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a), would prevent giving lower parts prices to the sophisticated customers only “where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them....” Ibid.; see, e.g., Falls City Industries, Inc. v. Vanco Beverage, Inc., 460 U.S. 428, 434-435, 103 S.Ct. 1282, 1288, 75 L.Ed.2d 174 (1983). That prohibited effect often occurs when price-discriminated goods are sold for resale ( i.e., to purchasers who are necessarily in competition with one another). E.g., FTC v. Morton Salt Co., 334 U.S. 37, 47, 68 S.Ct. 822, 828, 92 L.Ed. 1196 (1948); see P. Areeda & L. Kaplow, Antitrust Analysis ¶ 600, p. 923 (1988) (“Secondary-line injury arises [under the Robinson-Patman Act] when a powerful firm buying supplies at favorable prices thereby gains a decisive advantage over its competitors that are forced to pay higher prices for their supplies”). It rarely occurs where, as would be the case here, the price-discriminated goods are sold to various businesses for consumption.

【案由】
这是又一例涉及在反托拉斯争议中适用简易判决的标准的案例。本案的主要争议是，被告在一级设备市场上缺少市场支配力是否能排除其在销售修理用零部件市场（派生市场）中拥有市场支配力的可能性。

斯卡拉法官、奥康纳法官、托马斯法官提出异议，认为柯达公司不具有市场支配力，并提出只有当卖方具有市场支配力时，搭售行为才构成违法。因此应准许简易判决。