A Pragmatic Approach to Identifying and Analyzing Legitimate Tying Cases

EUROPEAN COMPETITION LAW ANNUAL 2003: WHAT IS AN ABUSE OF A DOMINANT POSITION?, Hart Publishing, Forthcoming

23 Pages Posted: 15 Nov 2003

See all articles by David S. Evans

David S. Evans

Global Economics Group; University College London

Jorge Padilla

Compass Lexecon

Michael A. Salinger

Boston University - Questrom School of Business

Date Written: August 2003

Abstract

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.

JEL Classification: K21, K42, L41

Suggested Citation

Evans, David S. and Padilla, Jorge and Salinger, Michael A., A Pragmatic Approach to Identifying and Analyzing Legitimate Tying Cases (August 2003). EUROPEAN COMPETITION LAW ANNUAL 2003: WHAT IS AN ABUSE OF A DOMINANT POSITION?, Hart Publishing, Forthcoming. Available at SSRN: https://ssrn.com/abstract=436608 or http://dx.doi.org/10.2139/ssrn.436608

David S. Evans (Contact Author)

Global Economics Group ( email )

111 Devonshire St.
Suite 900
Boston, MA 02108
United States

University College London ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Jorge Padilla

Compass Lexecon ( email )

Paseo de la Castellana 7
Madrid, 28046
Spain

Michael A. Salinger

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States
617-353-4408 (Phone)

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