The Elusive Antitrust Standard on Bundling in Europe and in the United States in the Aftermath of the Microsoft Cases
NYU Working Paper No. EC-08-01
123 Pages Posted: 9 Jan 2008 Last revised: 1 Sep 2014
Date Written: November 11, 2009
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.
Keywords: tying, bundling, foreclosure, requirement contracts, monopolization, Microsoft, predatory pricing
JEL Classification: K12, L12, L13, L41, L42, L63
Suggested Citation: Suggested Citation