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Lindenwood Coffee Company manufactures and sells single-cup home-brew coffee makers. Lindenwood also produces and sells single serve coffee pods for use in the single-cup home brewing systems. Sales of single-cup home brewing systems have significantly increased in recent years as the single-cup home-brew beverage market took off in the U.S. Several other companies manufacture and sell single-cup home-brewing systems, and have gradually increased their market share in the U.S. However, in 2014, Lindenwood still maintained a dominant position in the single-cup home brewing system market, controlling 73% of the sales in the U.S. Although Lindenwood’s single-cup coffee makers have an excellent reputation for quality, sales of Lindenwood’s individual coffee pods are not as dominant, having only 23% of the market for individual coffee pods. In January 2015, Lindenwood introduced a new single-cup coffee maker which includes digital technology that programs Lindenwood single-serve hot beverage pods to be used in the Lindenwood single-cup home-brew coffee makers. One of Lindenwood’s competitors, Giruek Kaffee, LLC, claims that the new Lindenwood digital single-cup coffee-maker prevents users of the Lindenwood single-cup coffee makers from using any coffee pods from Giruek Kaffee or any other seller of coffee pods other than Lindenwood Coffee Company. Giruek Kaffee seeks your advice as to the merits of pursuing an action against Lindenwood for violating federal antitrust laws. What is your advice?
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