IBM manufactures and sells computers and related equipment. It also has a leasing division. Greyhound was a leasing company that would purchase “second generation” computers from IBM at up to a 75 percent discount (depending on how old the equipment was) and then lease them to its customers at a relatively inexpensive price. In fact, because Greyhound could buy at such a high discount, it was able to undercut IBM’s standard lease rates. Although IBM had about 82 percent of this leasing market, IBM became concerned when its leasing market share fell. It determined that the main reason for its loss in the leasing market was that companies like Greyhound were able to offer better terms to consumers. IBM phased in reduced discount rates so that the maximum discount was 12 percent. Greyhound sued IBM, alleging monopolization in violation of the  Act.

CASE QUESTIONS

1. Who prevails and why? Explain your answer.

2. Are there any similarities between this case and the Microsoft case?