ABSTRACT
This chapter explores public policy toward five types of vertical restraints, including tying agreements, exclusive dealing agreements, territorial and customer restrictions, resale price maintenance, and group boycotts. The 1992 Kodak case was of importance because it addressed the issue of whether a firm without monopoly power in the tying product could be held to violate the antitrust laws. Kodak was a leading producer of micrographic equipment and copiers and also supplied repair parts and service for their equipment through a network of Kodak trained technicians. Instead, vertical maximum price fixing, like the majority of commercial arrangements subject to the antitrust laws, should be evaluated under the rule of reason. A small group of firms, with no market power that bands together to form a buying or selling co-operative will usually be protected from the antitrust laws as long as alternative sources of supply are readily available to non-members.
