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http://ssrn.com/abstract=1078932
 
 

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The Elusive Antitrust Standard on Bundling in Europe and in the United States in the Aftermath of the Microsoft Cases


Nicholas Economides


New York University - Leonard N. Stern School of Business - Department of Economics

Ioannis Lianos


University College London - Faculty of Laws

November 11, 2009

NET Institute Working Paper No. 07-47
NYU Law and Economics Research Paper No. 08-02
University College London Law Research Paper No. 09-03
NYU Stern School of Business 2451/26009
NYU Working Paper No. EC-08-01
Antitrust Law Journal, Vol. 76, No. 3, 2009

Abstract:     
This study analyzes and contrasts the U.S. and EU antitrust standards on bundling (in its various forms) and tying. The analysis is applied to the U.S. and EU cases concerning Microsoft's practice of integrating (tying) new products (Internet Explorer in the U.S. and Windows Media Player in the EU) with Windows as well as to cases brought in Europe and in the United States on bundled discounts. We conclude that there are important differences between the EC and U.S. antitrust law on the choice of the relevant analogy for bundling and tying (for example, a predatory price test versus an anticompetitive foreclosure test). The two jurisdictions also differ in their interpretations of the requirement for anticompetitive effects, and, in particular, the analysis of foreclosure and consumer harm. It seems that, in Europe, consumer detriment is found more easily under Article 82 of the Treaty of Rome than under the Sherman Act in the U.S., or at least that the standard of proof for consumer harm in the E.U. appears lower. We advocate a unified test for bundling and tying that would focus on anticompetitive foreclosure and absence of objective justifications. The function of the distinct product element of the tying test should be reconsidered and the coercion element of the test should be abandoned.

Number of Pages in PDF File: 123

Keywords: tying, bundling, foreclosure, requirement contracts, monopolization, Microsoft, predatory pricing

JEL Classification: K12, L12, L13, L41, L42, L63

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Date posted: January 9, 2008 ; Last revised: September 1, 2014

Suggested Citation

Economides, Nicholas and Lianos, Ioannis, The Elusive Antitrust Standard on Bundling in Europe and in the United States in the Aftermath of the Microsoft Cases (November 11, 2009). NET Institute Working Paper No. 07-47; NYU Law and Economics Research Paper No. 08-02; University College London Law Research Paper No. 09-03; NYU Stern School of Business 2451/26009; NYU Working Paper No. EC-08-01; Antitrust Law Journal, Vol. 76, No. 3, 2009. Available at SSRN: http://ssrn.com/abstract=1078932

Contact Information

Nicholas Economides (Contact Author)
New York University - Leonard N. Stern School of Business - Department of Economics
44 West 4th Street
New York, NY 10012
United States
212-998-0864 (Phone)
212-995-4218 (Fax)
HOME PAGE: http://www.stern.nyu.edu/networks/
Ioannis Lianos
University College London - Faculty of Laws ( email )
London WC1E OEG
United Kingdom
44 20 7679 1028 (Phone)
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