California Civil Jury Instructions (CACI)
3423. Tying - "Economic Power" Explained
In determining whether [name of defendant] has sufficient economic power in the market for [tying item], you may consider whether [name of defendant] has such a large share of the market for [tying item] that buyers do not have alternate sources of [tying item] or a reasonably available substitute. If [name of defendant] has economic power, it may be established even though it exists with respect to some, but not all, buyers.
You may also consider whether a buyer would be unable to easily locate a similar or equally desirable product in the marketplace. If buyers do not generally consider other products to be substitutes, this fact may give [name of defendant] economic power over its [tied item]. The fact that [name of defendant] can produce [tying item] in an efficient manner or at a high level of quality does not, by itself, mean that competitors do not offer a similar product.
Directions for Use
This instruction assumes that the plaintiff is seeking relief under Business and Professions Code section 16720. If the plaintiff is instead seeking relief under Business and Professions Code section 16727, this element is not required, so long as the plaintiff proves that the claimed tie-in affected a "not insubstantial amount" of sales of the tied product. If that proof is note summarily established or agreed to, then this instruction also must be read in such cases.
Sources and Authority
"[W]e emphasize that the power over the tying product . . . can be sufficient even though the power falls short of dominance and even though the power exists only with respect to some buyers in the market. As the cases unanimously underline, such crucial economic power may be inferred from the tying product's desirability to consumers or from uniqueness in its attributes." (Suburban Mobile Homes v. AMFAC Communities (1980) 101 Cal.App.3d 532, 544 [161 Cal.Rptr. 811], internal citations omitted.)
"Decisions of the United States Supreme Court 'have made unmistakably clear that the economic power over the tying product can be sufficient even though the power falls far short of dominance and even though the power exists only with respect to some of the buyers in the market.' " (Corwin v. Los Angeles Newspaper Services Bur. (1971) 4 Cal.3d 842, 858 [94 Cal.Rptr. 785, 484 P.2d 953], internal citation omitted.)
"Tying arrangements are illegal per se 'whenever a party has sufficient economic power with respect to the tying product to appreciably restrain free competition in the market for the tied product' and when 'a total amount of business, substantial enough in terms of dollar-volume so as not to be merely de minimis, is foreclosed to competitors by the tie.' " (Freeman v. San Diego Assn. of Realtors (1999) 77 Cal.App.4th 171, 184 [91 Cal.Rptr.2d 534], internal citations omitted.)
"To plead this element, appellants must allege facts to show that 'a total amount of business, substantial enough in terms of dollar-volume so as not to be merely de minimis, is foreclosed to competitors by the tie.' " (Morrison v. Viacom, Inc. (1998) 66 Cal.App.4th 534, 542 [78 Cal.Rptr.2d 133], internal citation omitted.)
1 Witkin, Summary of California Law (9th ed. 1987) Contracts, §§ 575- 590
2 Antitrust and Trade Regulation Law Section, State Bar of California, California Antitrust Law (2d ed. 2001), § 10.06D
6 Antitrust Laws & Trade Regulation, Ch. 105, California, § 105.04 (Matthew Bender)
3 Levy et al., California Torts, Ch. 40, Fraud and Deceit and Other Business Torts, § 40.168 (Matthew Bender)
49 California Forms of Pleading and Practice, Ch. 565, Unfair Competition (Matthew Bender)
(New September 2003)