## Facts

- United States Steel Corporation’s Home Division manufactured prefabricated houses, and its wholly owned subsidiary, United States Steel Homes Credit Corporation, financed customers.
- Fortner Enterprises, Inc., a real estate developer, sought financing to acquire and develop land for a subdivision using the prefabricated houses.
- Petitioners agreed to finance Fortner’s land acquisition and development costs in exchange for Fortner’s promise to purchase the prefabricated houses.
- Fortner sued for treble damages under federal antitrust law, alleging an unlawful tie: credit (tying product) conditioned on purchasing prefabricated houses (tied product).
- The lower courts treated the following as evidence of petitioners’ economic power in credit: (1) corporate size and backing, (2) use of similar tying arrangements with other customers, (3) allegedly noncompetitive house prices, and (4) “unique” financing terms, including 100% financing of acquisition and development.

## Issues

1. Whether the evidence established that petitioners possessed “appreciable economic power” in the market for credit, as required for per se condemnation of a tying arrangement under the Sherman Act.
2. Whether “unique” and favorable credit terms, without more, permit an inference of the requisite economic power in the credit market.

## Decision

- The Supreme Court reversed the Sixth Circuit.
- The Court held that the record did not support a finding that petitioners had appreciable economic power in the tying product market (credit).
- The Court rejected the inference of economic power based solely on the uniqueness of credit terms where the record showed only a willingness to accept lower profits or greater risks than competitors.
- Because Fortner failed to prove the economic-power element, the tying claim failed.

## Legal Principles

- Per se tying liability requires proof that the seller has appreciable economic power in the tying product, i.e., power sufficient to force a buyer to accept a tied product in a manner the buyer would not accept in a competitive market.
- Unusually favorable or “unique” credit terms do not, by themselves, show economic power when they reflect only a willingness to take less profit or more risk.
- Corporate size or wealth does not establish economic power absent evidence of market conditions showing an ability to control terms or exclude competition.
- A pattern of using ties with other customers does not substitute for proof of economic power in the tying market.
- Evidence that the tied product was priced above competitive levels does not, standing alone, prove economic power in the tying product.

## Conclusion

The Court held that per se tying liability cannot rest on an “unusual” credit package alone; without evidence of a cost advantage, meaningful product differentiation, or other market-based indicators showing power in the credit market, favorable financing terms do not establish the “appreciable economic power” required to condemn a tie under the Sherman Act.


United States Steel Corp. v. Fortner Enters., Inc., 429 U.S. 610 (1977)