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SCALIA, J., dissenting

parts for its own brand amounts to "market power" of a character sufficient to permit invocation of the per se rule against tying. As the Court observes, ante, at 479-481, n. 29, we have applied the per se rule to manufacturer ties of foremarket equipment to aftermarket derivatives-but only when the manufacturer's monopoly power in the equipment, coupled with the use of derivative sales as "counting devices" to measure the intensity of customer equipment usage, enabled the manufacturer to engage in price discrimination, and thereby more fully exploit its interbrand power. See International Salt Co. v. United States, 332 U. S. 392 (1947); International Business Machines Corp. v. United States, 298 U. S. 131 (1936); United Shoe Machinery Corp. v. United States, 258 U. S. 451 (1922). That sort of enduring opportunity to engage in price discrimination is unavailable to a manufacturer-like Kodak-that lacks power at the interbrand level. A tie between two aftermarket derivatives does next to nothing to improve a competitive manufacturer's ability to extract monopoly rents from its consumers.3

3 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 479-481, 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 tiecompelled to buy both. See ante, at 475-476.

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

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SCALIA, J., dissenting

Nor has any court of appeals (save for the Ninth Circuit panel below) recognized single-branded aftermarket power as a basis for invoking the per se tying prohibition. See Virtual Maintenance, Inc. v. Prime Computer, Inc., 957 F. 2d 1318, 1328 (CA6 1992) ("Defining the market by customer demand after the customer has chosen a single supplier fails to take into account that the supplier . . . must compete with other similar suppliers to be designated the

supra, at 495. 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 lockedin 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 (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 (1948); see P. Areeda & L. Kaplow, Antitrust Analysis 1600, 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.

SCALIA, J., dissenting

sole source in the first place"); Grappone, Inc. v. Subaru of New England, Inc., 858 F. 2d, at 798 (“[W]e do not see how such dealer investment [in facilities to sell Subaru products] . . . could easily translate into Subaru market power of a kind that, through tying, could ultimately lead to higher than competitive prices for consumers"); A. I. Root Co. v. Computer/Dynamics, Inc., 806 F. 2d 673, 675-677, and n. 3 (CA6 1986) (competition at "small business computer" level precluded assertion of computer manufacturer's power over software designed for use only with manufacturer's brand of computer); General Business Systems v. North American Philips Corp., 699 F. 2d 965, 977 (CA9 1983) ("To have attempted to impose significant pressure to buy [aftermarket hardware] by use of the tying service only would have hastened the date on which Philips surrendered to its competitors in the small business computer market"). See also Parts & Elec. Motors, Inc. v. Sterling Elec., Inc., 866 F. 2d, at 233 (law-of-the-case doctrine compelled finding of market power in replacement parts for single-brand engine).

We have recognized in closely related contexts that the deterrent effect of interbrand competition on the exploitation of intrabrand market power should make courts exceedingly reluctant to apply rules of per se illegality to intrabrand restraints. For instance, we have refused to apply a rule of per se illegality to vertical nonprice restraints "because of their potential for a simultaneous reduction of intrabrand competition and stimulation of interbrand competition," Continental T. V., Inc. v. GTE Sylvania Inc., 433 U. S. 36, 51-52 (1977), the latter of which we described as "the primary concern of antitrust law," id., at 52, n. 19. We noted, for instance, that "new manufacturers and manufacturers entering new markets can use the restrictions in order to induce competent and aggressive retailers to make the kind of investment of capital and labor that is often required in the distribution of products unknown to the consumer," and that "[e]stablished manufacturers can use them

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SCALIA, J., dissenting

to induce retailers to engage in promotional activities or to provide service and repair facilities necessary to the efficient marketing of their products." Id., at 55. See also Business Electronics Corp. v. Sharp Electronics Corp., 485 U. S. 717, 726 (1988). The same assumptions, in my opinion, should govern our analysis of ties alleged to have been "forced" solely through intrabrand market power. In the absence of interbrand power, a manufacturer's bundling of aftermarket products may serve a multitude of legitimate purposes: It may facilitate manufacturer efforts to ensure that the equipment remains operable and thus protect the seller's business reputation, see United States v. Jerrold Electronics Corp., 187 F. Supp., at 560; it may create the conditions for implicit consumer financing of the acquisition cost of the tying equipment through supracompetitively-priced aftermarket purchases, see, e. g., A. Oxenfeldt, Industrial Pricing and Market Practices 378 (1951); and it may, through the resultant manufacturer control of aftermarket activity, "yield valuable information about component or design weaknesses that will materially contribute to product improvement," 3 Areeda & Turner ¶733c, at 258-259; see also id., ¶829d, at 331–332. Because the interbrand market will generally punish intrabrand restraints that consumers do not find in their interest, we should not-under the guise of a per se rule-condemn such potentially procompetitive arrangements simply because of the antitrust defendant's inherent power over the unique parts for its own brand.

I would instead evaluate the aftermarket tie alleged in this case under the rule of reason, where the tie's actual anticompetitive effect in the tied product market, together with its potential economic benefits, can be fully captured in the analysis, see, e. g., Jefferson Parish, 466 U. S., at 41 (O'CONNOR, J., concurring in judgment). Disposition of this case does not require such an examination, however, as respondents apparently waived any rule-of-reason claim they

SCALIA, J., dissenting

may have had in the District Court. I would thus reverse the Ninth Circuit's judgment on the tying claim outright.

III

These considerations apply equally to respondents' §2 claims. An antitrust defendant lacking relevant "market power" sufficient to permit invocation of the per se prohibition against tying a fortiori lacks the monopoly power that warrants heightened scrutiny of his allegedly exclusionary behavior. Without even so much as asking whether the purposes of § 2 are implicated here, the Court points to Kodak's control of "100% of the parts market and 80% to 95% of the service market," markets with "no readily available substitutes," ante, at 481, and finds that the proffer of such statistics is sufficient to fend off summary judgment. But this showing could easily be made, as I have explained, with respect to virtually any manufacturer of differentiated products requiring aftermarket support. By permitting antitrust plaintiffs to invoke §2 simply upon the unexceptional demonstration that a manufacturer controls the supplies of its single-branded merchandise, the Court transforms §2 from a specialized mechanism for responding to extraordinary agglomerations (or threatened agglomerations) of economic power to an all-purpose remedy against run-of-themill business torts.

In my view, if the interbrand market is vibrant, it is simply not necessary to enlist §2's machinery to police a seller's intrabrand restraints. In such circumstances, the interbrand market functions as an infinitely more efficient and more precise corrective to such behavior, rewarding the seller whose intrabrand restraints enhance consumer welfare while punishing the seller whose control of the aftermarkets is viewed unfavorably by interbrand consumers. See Business Electronics Corp., supra, at 725; Continental T. V., Inc., supra, at 52, n. 19, 54. Because this case comes to us on the as

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