Antitrust and Self-Preferencing

“Self-preferencing” refers to situations in which a firm favors, or “preferences” its own products over those of rivals. Of course, it would literally be “self preferencing” for a producer to sell nothing but its own products. That type of self-preferencing has not provoked much concern outside of the highly limited law of refusal to deal, although it may violate some proposed legislation. More generally, harmful self-preferencing occurs when a firm sells multiple brands and gives its own brand favorable treatment, when it tries to steer customers of some primary product to its own secondary product, or when it excludes or discriminates among various products. Concerns about self-preferencing also embrace practices that make it more difficult for the user of a product or independent third parties to repair it.Both patent and antitrust law limit some self-preferencing in the United States. Patent law does it through its doctrine of exhaustion and its repair/reconstruction distinction. However, the courts have not effectively policed self-preferencing through the use of design patents. Antitrust law does it through the law of tying, exclusive dealing, and unilateral refusal to deal. Both patent law and antitrust law have severe limitations on coverage. That opens up the question whether we need new legislation governing self preferencing, and what good legislation should do.