The Antitrust Revolution: Economics, Competition, and Policy

By John E. Kwoka Jr.; Lawrence J. White | Go to book overview

CASE 17
Links between Markets and Aftermarkets:
Kodak (1997)

Jeffrey K. MacKie-Mason and John Metzler

The difficulty of obtaining parts, technical information and diagnostic
software has effectively kept 3rd party service suppliers out of the ad-
vanced equipment service market1

Both IBM and Xerox will sell spare parts, but we do not. This makes it
more difficult for a third party to service our copiers.2


INTRODUCTION

In 1987 seventeen small companies filed an antitrust lawsuit against the Eastman Kodak Corporation (“Kodak”). These companies, several of them literally “mom and pop” operations, had been trying to compete with Kodak for contracts to provide maintenance service to end-use customers who owned expensive, durable Kodak photocopier or micrographics equipment. Eleven years later, there had been two district court opinions, two from the Ninth Circuit Court of Appeals, and one from the Supreme Court. Kodak appealed its guilty verdict to the Supreme Court one last time, but the Court refused to hear the appeal, and the case finally ended in 1998. Entire conferences have been devoted to the antitrust economics issues raised by Kodak, and numerous articles have been published in both legal and economics scholarly journals. Since the initial Supreme Court opinion in Kodak, there

MacKie-Mason was expert economist for the plaintiffs on liability issues, and testified at trial.
Metzler assisted in the economic analysis.

1Trial Exhibit (hereafter, “Ex.”) 99 at 6762, a Kodak report on micrographic service.

2Ex. 649 at 1315–1316, a Kodak internal document.

-428-

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