Abilor

Recently, after being forced at the local Toys 'R' Us to buy a Wii bundle (which I refused), I inquired into the mandatory Toys 'R' us warranty. Failure to sell me the Nintendo Wii without the purchase of the optional warranty may constitute a violation of the Sherman Act, the Clayton Act, the Federal Trade Commission Act, and US Supreme Court Decision JEFFERSON PARISH HOSPITAL DIST. NO. 2 v. HYDE, 466 U.S. 2 (1984), and a general violation of federal antitrust and consumer protection laws.

By requiring the purchase of a Toys 'R' Us warranty and games off an approved list to purchase the Nintendo Wii console right in front of me, Toys 'R' Us made a "tying" arrangement. The New York Antitrust enforcement agency summarizes tying-in as, "An illegal tie-in occurs when a seller with market power over one product (the 'tying product') will only sell it to buyers who agree to buy another product (the 'tied product')." (http://www.oag.state.ny.us/business/antitrust.html). The University of Pennsylvania Health System Office of Legal Affairs (http://www.uphs.upenn.edu/legal/antitrust.html) summarizes the Sherman Act:

"The Sherman Act prohibits contracts, combinations and conspiracies between two or more persons or companies that unreasonably restrain trade. Although unilateral activities, such as activities between a parent and subsidiary corporations or between subsidiary corporations, to achieve competitive advantage or market dominance are normally permitted, a company acting unilaterally or with others is prohibited from monopolizing or attempting to monopolize by exclusionary or predatory practices." This language may not apply to my case, depending on the actual company offering the warranty, but may still constitute a violation.

It also summarizes the Clayton Act as:

"The Clayton Act prohibits exclusive dealing arrangements where the seller conditions the sale or lease of goods upon the buyers refusal to deal with a competing seller or upon entering into a tying arrangement, where the seller conditions the sale or lease of a desired product upon the buyer purchasing or leasing another product, where competition is likely to be lessened substantially. Other sections of this law prohibit mergers or acquisitions, joint ventures or vertical arrangements which substantially lessen competition."

The Jefferson Parish decision's language claims:

"[T]he essential characteristic of an invalid tying arrangement lies in the seller's exploitation of its control over the tying product to force the buyer into the purchase of a tied product that the buyer either did not want at all, or might have preferred to purchase elsewhere on different terms." (http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=US&vol=466&invol=2)

It should be noted that the recent Independent Ink vs. Illinois Tool Works Supreme Court decision has changed a lot of the applicability of the Jefferson Parish decision, though much of it may still apply here.

The bottom line is not only was I treated disrespectfully by Toys 'R' Us, but what they did also seems to me upon initial examination to be overtly illegal, possibly grounds for class-action civil litigation.