a. Has Stilwell violated the antitrust laws?
b. What is the tying product?
c. What is the tied service?
d. Does Stilwell have significant power in the market for the tying product?
e. What defense might it make?
f. What outcome would you predict?
If you live in Stilwell, Oklahoma (pop. 2,700), you do not have to buy your electricity from the utility owned by the city. However, you can get awfully thirsty if you buy it from somebody else. When a real estate developer built a new apartment complex here, he ordered electricity from an out of-town utility, which offered him a good deal on water heaters. Local officials told him that if he did not buy the town's electricity, they would deny him water and sewer service, which he could not buy elsewhere. The developer figured it would be tough to find renters willing to live without running water, so he decided to buy power from the city.