Monday, September 11, 2017
Richard M. Steuer, Mayer Brown LLP describes Musthavedness.
ABSTRACT: “Conditional pricing” cases, whether they involve bundled discounts, loyalty discounts, or tying by means of differential pricing, all rest on evidence that the seller markets a “must have” product or service, which confers market power. This article examines how the courts assess “musthavedness” – i.e., the strength of a product’s essentiality. In many cases, courts have applied this concept without specifically recognizing it. In other cases, courts have explicitly addressed whether or not a product qualifies as a “must have” purchase, sometimes using the term “indispensable” or distinguishing between “contestable” and “incontestable” purchases. Either way, the standard employed for determining “musthavedness” has proven to be somewhat unpredictable and a more structured approach is in order. This article proposes that although conditional pricing cases vary considerably, the evaluation of “musthavedness” should be the same in all of them. The challenge is drawing the line between merely popular products and incontestable, “must-have” products, and assessing just how much musthavedness each product truly possesses. The author concludes that although each case must be judged on its own facts, it is possible to enumerate a list of key factors that regularly should be considered in evaluating whether a product truly qualifies as “must have.”