ABSTRACT
A significant concern for antitrust and competition regimes is the problem of secondary or related markets, usually existing at different stages in the production or distribution chain. The fear of the authorities over these arrangements is that dominant firms may extend (leverage) their monopoly power from one market into gaining a strong hold, if not a position of dominance, in a related market. The leverage hypothesis could be observed in any vertical arrangements, where a dominant supplier provides goods or services (or refuses to do so) on the basis of terms and conditions not independent of its market power. The most common application of this theory centres on tying arrangements – that is, situations where a firm contractually makes the sale of one product conditional on the sale of a second product: generally, in order to buy product X (the tying product), one is also required to buy product Y, (the tied product) from the seller (tying can also be achieved through the technological binding of separate products).
