by Daniel Rossman*

The Supreme Court currently analyzes tying arrangements under the modified per se rule from Jefferson Parish Hospital v. Hyde. Under this standard, a court should conduct an in-depth inquiry into a firm’s market power and condemn arrangements that tie two products together. Because Jefferson Parish is a “per se” rule, defendants cannot justify their actions with procompetitive explanations. This Contribution argues that Jefferson Parish’s per se rule against tying arrangements ought to be replaced by the rule of reason for three reasons. First, the per se rule fails to consider the efficiencies that can be associated with tying. Second, contemporary understandings of tying arrangements no longer justify the per se rule. Finally, the benefit of the Jefferson Parish per se rule is undercut by its four-step framework. Instead, courts should adopt the rule of reason which would allow them to assess the potential efficiencies created through tying arrangements.

A tying arrangement is an agreement where one party sells a product “on the condition that the buyer also purchases a different (or tied) product” from it.1 In certain circumstances, a tying arrangement can be anticompetitive because it allows a seller to use “their power in one market to gain control in a separate market.”2 Under these circumstances, antitrust law tempers the offensive leveraging by which a monopolist in market A moves into and dominates a separate market B.3 However, in other circumstances, tying agreements can reduce transaction costs by bundling complementary components, often making it more efficient to sell two products together.4 Therefore, “not all ties are illegal,” or problematic.5

Since not all ties are bad, courts have developed a number of tests to mitigate the risk of falsely identifying a beneficial arrangement as anticompetitive.6 The primary method courts use to adjudicate tying claims is the modified per se rule adopted from the Supreme Court’s decision in Jefferson Parish Hospital v. Hyde.7 A minority of courts instead use the rule of reason, which, unlike the modified per se rule, allows a defendant to offer a pro-competitive rationale for their behavior.8 This Contribution argues that the Jefferson Parish per se test should be set aside in favor of the rule of reason.

Under Jefferson Parish, tying arrangements are anticompetitive if (1) the tying and tied goods are two separate products, (2) the defendant has market power in the tying product market, (3) the defendant forces consumers to purchase the tied product from it, and (4) the tying arrangement forecloses a substantial volume of commerce.9

First, the modified per se rule from Jefferson Parish fails to consider potential efficiencies gained from tying products together. It has been criticized as “backward-looking” and a “poor prox[y] for overall efficiency in the presence of new and innovative integration.”10 Generally speaking, the modified per se rule looks unkindly at schemes that tie two products which were historically sold separately without considering the potential efficiencies created.11 Under Jefferson Parish’s “backward-looking” framework, Microsoft’s novel integration of its Internet Explorer browser into its Windows operating system initially faced serious antitrust scrutiny. Historically speaking, Internet Explorer and Windows were sold separately, but Microsoft then tied them together.12 Fortunately, the D.C. Circuit in United States v. Microsoft Corp. understood that Microsoft’s integration offered efficiencies that Jefferson Parish did not account for,13 and therefore rightly analyzed Microsoft’s scheme under the rule of reason, finding that the integration was not in fact anticompetitive.14 Because of these efficiencies, the Court held that Microsoft’s integration of Internet Explorer into its Windows operating system was not an anticompetitive tying arrangement.15

The efficiencies Microsoft experienced from its tying arrangement were not a fluke. In fact, tying arrangements oftentimes generate efficiencies.16 Given this, courts should not discount per se defendants’ justifications of their conduct on efficiency grounds. To allow for such determinations, the Jefferson Parish approach should be replaced by the rule of reason.

Second, contemporary understandings of tying arrangements no longer justify the per se rule. When it comes to many other restraints in antitrust, courts are apt not to use the per se rule unless said restraint “obviously threaten[s] to reduce output and raise prices.”17 Even then, courts “take special care not to” label a restraint as unlawful per se until they “have amassed considerable experience with the . . . restraint and can predict with confidence that it would be invalidated in all or almost all instances.”18 However, this approach contrasts with the Sherman Antitrust Act’s early history, where the Supreme Court condemned all tying arrangements because, according to the Court, they served “hardly any purpose beyond the suppression of competition.”19 Although the Court has moved away from this view and found that some tying arrangements are procompetitive,20 the Court’s continued use of the per se rule is a lingering byproduct of its early Sherman Act jurisprudence, which was hostile towards tying.

The Court’s view is also not shared by many contemporary commentators, who now believe that tying is “often pro-competitive or, at least, not so clearly anticompetitive . . . to justify . . . [the] per se rule.”21 Tying arrangements are widespread in competitive markets and often result in benefits to consumers, such as reduced costs and improved product offerings.22 Furthermore, modern economic analysis does not support the presumption that tying is inherently anticompetitive, even when practiced by firms with significant market power.23 Because tying is often pro-competitive, it is difficult to maintain that tying arrangements should “be invalidated in all or almost all instances” because they almost always “threaten[] to reduce output and raise prices.” Thus, the per se rule is no longer the appropriate antitrust standard for addressing tying arrangements.

Finally, while the per se rule traditionally serves as a bright-line test that obviates the need for extensive economic inquiry, the Jefferson Parish approach complicates rather than simplifies antitrust adjudication. By incorporating elements of market power assessment—typically reserved for the rule of reason—this hybrid standard forces courts to engage in fact-intensive evaluations that undermine the supposed efficiency of per se condemnation.24 Consequently, rather than saving time and resources, the Jefferson Parish standard requires courts to conduct a preliminary market power inquiry before determining whether the per se rule even applies. This additional analytical step negates many of the supposed procedural advantages of per se treatment, rendering the test both inconsistent and inefficient.

Moreover, Jefferson Parish undercuts its own goal of deterring anticompetitive conduct by creating uncertainty in enforcement. A clear per se prohibition would at least provide firms with a predictable legal framework, while a rule of reason approach would allow for a nuanced, evidence-based assessment of competitive harm. Instead, Jefferson Parish’s modified per se rule offers neither predictability nor analytical rigor, leaving firms uncertain as to whether their tying arrangements will be condemned outright or subjected to further scrutiny.25 This unpredictability can deter businesses from engaging in pro-competitive tying arrangements that could benefit businesses and consumers alike. Thus, rather than serving its intended function as an efficient enforcement mechanism, the Jefferson Parish standard muddies antitrust jurisprudence and discourages legitimate business practices that could enhance economic welfare.

The Jefferson Parish framework for evaluating tying arrangements is outdated, analytically flawed, and ill-suited for modern antitrust jurisprudence. The per se rule, while originally intended to provide a clear and efficient means of identifying anticompetitive tying, disregards the economic reality of potential efficiencies. The Supreme Court itself has acknowledged that tying is not inherently anticompetitive,26 yet Jefferson Parish persists as an anachronistic relic of an era when all tying arrangements were presumed harmful. By relying on a “partial per se” standard, Jefferson Parish offers neither the simplicity of true per se condemnation nor the nuanced analysis of a rule of reason framework. Instead, it forces courts to conduct convoluted inquiries that ultimately undermine the very efficiency the per se rule was meant to provide.

At bottom, the continued adherence to Jefferson Parish risks chilling innovation and deterring pro-competitive business strategies. Many tying arrangements result in consumer benefits, including lower costs, streamlined distribution, and enhanced product integration. Rather than holding on to a relic of earlier jurisprudence, courts should follow the example set by the D.C. Circuit in Microsoft and adopt the rule of reason standard for tying arrangements.27

* Daniel Rossman is a J.D. Candidate (2025) at New York University School of Law. This Contribution is a commentary on the problem at the 2024 Global Antitrust Invitation Moot Court Competition hosted by George Mason University School of Law. One of the questions presented concerned a business engaged in an anticompetitive tying scheme. The defendant’s liability hinged on whether the court followed the per se or rule of reason standard. This Contribution distills one side of the argument, and the views expressed herein do not necessarily represent the author’s views.

1. Northern Pacific Ry. Co. v. United States, 356 U.S. 1, 5–6 (1958).

2. Healy v. Cox Commc’ns., Inc. (In re Cox Enters.), 871 F.3d 1093, 1099 (10th Cir. 2017).

3. See United States v. Microsoft Corp., 253 F.3d 34, 87 (D.C. Cir. 2001) (discussing the harms of offensive leveraging).

4. See id. at 87–88.

5. Avaya Inc., RP v. Telecom Labs, Inc., 838 F.3d 354, 398 (3d Cir. 2016). 

6. See e.g., id. at 392 (describing how tying claims are scrutinized under either the rule of reason or the per se rule).

7. Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 12 (1984) (holding that tying arrangements ought to be analyzed under a modified per se rule, which added numerous steps to the traditional per se rule).

8. See Microsoft Corp., 253 F.3d at 84. (applying the rule of reason because of the efficiencies associated with the tying arrangement at issue).

9. Jefferson Parish, 466 U.S. at 12.

10. Microsoft Corp., 253 F.3d at 89, 92.

11. See Jefferson Parish, 466 U.S. at 18 (holding that a per se violation requires “the tying and tied goods [to be] two separate products”).

12. Microsoft Corp., 253 F.3d at 89.

13. The rule of reason allows the defendant to offer a “procompetitive rationale” for their policy. NCAA v. Alston, 594 U.S. 69, 96–97 (2021). The per se rule does not afford the defendant this opportunity. Microsoft Corp., 253 F.3d at 92.

14. See Microsoft Corp., 253 F.3d at 94.

15. Id.

16. David S. Evans, Untying the Knot: The Case for Overruling Jefferson Parish U.S. Dept. of Just.13 (July 2006), https://www.justice.gov/archives/atr/untying-knot-case-overruling-jefferson-parish#:~:text=The%20Jefferson%2DParish%20test%20for,that%20outweigh%20potential%20economic%20benefits.

17. Alston, 594 U.S. at 89.

18. Id. (internal citations omitted).

19. Healy, 871 F.3d at 1098.

20. See Jefferson Parish, 466 U.S. at 12 (noting that not every tying arrangement is anticompetitive).

21. 1 Antitrust Laws and Trade Regulation: Desk Edition § 2.04 (2025).

22. Evans, supra note 15, at 13.

23. Id.

24. Matthew Hodgson, No Such Thing as Partial Per se: Why Jefferson Parish v. Hyde Should be Abolished in Favor of a Rule of Reason Standard for Tying Arrangements, 3 Bus. Entrepreneurship & Tax L. Rev. 313, 314 (2019).

25. Id. at 327.

26. See Jefferson Parish, 466 U.S. at 12 (noting that not every tying arrangement is anticompetitive).

27. See Microsoft Corp., 253 F.3d at 94.