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Tied Selling

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Tied Selling
The illegal practice of a company providing a product or service on condition the customer purchases a product from the same or related company.
    
It is mainly used in reference to banks and referred to as coercive tied selling. The basic idea is that consumers are harmed by being forced to buy an undesired good (the tied good) in order to purchase a good they actually want (the tying good), and so would prefer that the goods be sold separately. The company doing this bundling may have a significantly large market share so that it may impose the tie on consumers, despite the forces of market competition. The tie may also harm other companies in the market for the tied good, or who sell only single components.
    
For example, your bank's mortgage specialist tells you that you qualify for a home mortgage. Then you're told that the bank Will approve it only if you transfer your investments to the bank or its affiliates. You want the mortgage, but you don't want to move your investments.
Posted by  Privatebanking.com
 
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