Question

Question: Attorneys for Eastman Kodak argued before the U.S. Supreme Court to defend the company against charges levied by several independent firms that provided service for machines sold by Eastman Kodak. At issue was a decision by Kodak to limit the availability of replacement parts to these firms, making it more difficult for them to compete against Kodak in servicing Kodak machines. The suit alleged that Kodak unlawfully tied the sale of service for its machines to the sale of parts and, therefore, unlawfully monopolized and attempted to monopolize the sale of service and parts for such machines. Under which act do you think Kodak was charged?

Short answer

Answer:

Kodak was indicted underSection 2 of the Sherman Antimonopoly Act. This makes monopoly or monopoly attempts illegal.

Step-by-step solution

Monopoly 

A monopoly is a form of exchange in which there prevails only one vendor and it caters to the market demand. There are no rivals due to the existence of restrictions like license, patent, unavailability of raw materials, etc.

 Step 2: Article 2 of Sherman Antitrust Act

Eastman Kodak was accused of monopolizing the selling of replacement and service parts for machinesthat it had sold to numerous independent businesses in order to limit their capacity to offer support for those companies' products.

Eastman Kodak was accused under Section 2 of the Sherman Antitrust Act ofas a result of the lawsuit brought against the company accusing it of illegally monopolizing and attempting to monopolize the selling of services and machine parts. Any entity is not allowed to engage in monopolizing operations under this law.