Tying and Bundling

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Tying and Bundling

• Second Annual Conference of the GCLC
• Christian Ahlborn
• 17 June 2005

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Overview

• The concepts of tying and bundling
• Developments in economic analysis
• Error costs and implications
• Three legal approaches to tying
• the modified per se approach (Jefferson Parish)
• the per se approach (Hilti and Tetra Pak II)
• the Commissions rule of reason approach
• Conclusions

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Definitions
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Economic Analysis
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Error Cost Analysis (1)
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Error Cost Analysis (2)
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Legal Analysis (1)

• Modified Per Se of Jefferson Parish

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Legal Analysis (2)

• Commissions Rule of Reason approach in Microsoft

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Conclusions (1)

• There are similarities between EU and U.S.
  approach to tying
• Major legal rules tend to be more hostile towards
  tying than is justified according to economic
  analysis
• In the U.S. there has been a lively intellectual
  debate for years, which is just starting at the
  other side of the Atlantic
• In the U.S. the Courts have been a key
  participant in this debate, while there is
  deafening silence from the European Courts

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Conclusions (2)

• Key issues
• What is the right legal rule?
• What is the right safe haven?
• What is the right standard of proof for
  competitive harm and efficiencies?
• On whom should the burden of balancing fall?

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• Doc explorer ref A05176184