Question

Universal Syndication has told television stations and networks that they cannot have the rights to play "Friends" reruns unless they also agree to take packages of Charlie Chan movies, Tony Orlando and Dawn, and Rin Tin Tin reruns. The stations and networks complain that Chan movies, Tony, and Rin Tin Tin reruns do not draw viewers and that they have trouble selling the ad time on such shows. Universal Syndication’s requirement: a. is a tying arrangement that is a per se violation of federal antitrust law. b. is a tying arrangement that may be a violation of federal antitrust law. c. is one that it is free to impose so long as other syndicators are selling shows. d. none of the above

Answer 1

Answer:

The answer is b. is a tying arrangement that may be a violation of federal antitrust law.

Explanation:

If Universal Syndication has told television stations and networks that they cannot have the rights to play program (“Friends” rerun), unless they also agree to take packages (i.e., typing of other packages), even though the television stations and networks complain that the packages do not draw viewers ,then Universal Syndication’s requirement for tying (or bundling) might be a violation of federal antitrust law because it (Universal Syndication) could be using monopoly power in one television market as an influence to control competition, and strengthen its monopoly power in another market.

Answer 2

Answer:

b) is a tying arrangement that may be a violation of federal antitrust law.

Explanation:

A tying arrangement is one where in order to buy one product, the buyer must also purchase another separate product from the seller. Universal Syndication's requirement isn't necessarily unlawful and if it is, it may be illegal per se or illegal under the rule of reason, depending on whether or not it falls under the requirements to be a per se violation, which include whether the requirement promotes or suppresses market competition.