The Antitrust Economics of Tying: A Farewell to Per Se Illegality

69 Pages Posted: 2 Jun 2003

See all articles by David S. Evans

David S. Evans

University College London; Global Economics Group

Jorge Padilla

Compass Lexecon

Christian Ahlborn

Linklaters LLP

Date Written: April 21, 2003

Abstract

We describe the main features of U.S. and E.C. tying law and consider their recent evolution. We then review the economic literature on tying and summarize its main implications for the analysis of tying cases: First, recent advances in economic theory unambiguously endorse a rule-of-reason approach to tying such as that adopted by the D.C. Circuit Court of Appeals in Microsoft III. Second, there is no economic basis for a per se prohibition of tying. And third, the modified per se rule adopted by the U.S. Supreme Court in Jefferson Parish does not accurately screen pro-competitive from anticompetitive tying. Drawing on the findings of the economic models developed by the Chicago and post-Chicago Schools, we conclude by proposing a three-step test to implement rigorously a rule-of-reason analysis to tying cases.

JEL Classification: K21, K42, L41

Suggested Citation

Evans, David S. and Evans, David S. and Padilla, Jorge and Ahlborn, Christian, The Antitrust Economics of Tying: A Farewell to Per Se Illegality (April 21, 2003). Available at SSRN: https://ssrn.com/abstract=381940 or http://dx.doi.org/10.2139/ssrn.381940

David S. Evans (Contact Author)

University College London ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Global Economics Group ( email )

One Beacon St
Boston, MA 02108
United States

Jorge Padilla

Compass Lexecon ( email )

Paseo de la Castellana 7
Madrid, 28046
Spain

Christian Ahlborn

Linklaters LLP ( email )

One Silk Street
London EC2Y 8HQ
United Kingdom
44 20 7456 2000 (Phone)
44 20 7456 2222 (Fax)

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