AFTERMARKETS AND CONSUMER WELFARE: MAKING SENSE OF KODAK

Abstract

The Supreme Court, in Eastman Kodak Co. v. Image Technical Services, Inc.,1 ruled that a manufacturer could, as a matter of law, have monopoly power in the servicing of its own equipment, even if it had no such power in the sale of that equipment. In other words, aftermarkets could be relevant antitrust markets, even if equipment markets are competitive. The Court thus concluded that Kodak's refusal to sell its proprietary spare parts to independent service organizations (ISOs) could, at least in theory, allow Kodak to control the aftermarket for the servicing of Kodak equipment, thereby using its control over Kodak parts to gain control over the servicing of Kodak machines.