ILC Peripherals Leasing v. IBM

Citation: ILC Peripherals Leasing Corp. v. IBM Corp., 448 F. Supp. 228 (N.D. Cal. 1978).

Plaintiffs brought an antitrust action against IBM, alleging that IBM's practice of selling its Madrid disk drive unit and head/disk assembly for a single price constituted an illegal tying arrangement. After reviewing the history of disk drive technology, Judge Conti found (1) that the function of the aggregation of drive and assembly was "to provide users with a very large storage capacity that is permanently on line"; (2) that the integration of disk and assembly resulted in cost savings apart from merely reduced sales expenses and the like of any tie in; and (3) that the drive and assembly are normally sold and used as a unit even by plaintiffs. The court granted IBM a directed verdict.