A Pragmatic Approach to Identifying and Analyzing Legitimate Tying Cases
David S. Evans
University of Chicago Law School; University College London; Global Economics Group
Michael A. Salinger
Boston University - School of Management
EUROPEAN COMPETITION LAW ANNUAL 2003: WHAT IS AN ABUSE OF A DOMINANT POSITION?, Hart Publishing, Forthcoming
There is a wide and growing consensus among antitrust scholars and practitioners in favor of a rule-of-reason approach to the assessment of tying by dominant firms. However, a rule-of-reason analysis may or may not produce socially optimal outcomes depending on how it is conducted in practice. A rule-of-reason test that places the same weight on factual evidence as on theoretical speculation is bound to cause as much harm as a rule that considers tying per se illegal: many socially beneficial ties will be found illegal. This paper discusses how to best implement a rule-of-reason approach. We consider two alternatives, a simple balancing test and a structured test, and conclude in favor of the structured test, as it is less likely to lead to costly mistakes.
Note: This work was prepared for the Eighth Annual EU Competition Law and Policy Workshop, June 6-7, 2003, EUI Florence.
Number of Pages in PDF File: 23
JEL Classification: K21, K42, L41Accepted Paper Series
Date posted: November 15, 2003
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