Working Paper: CEPR ID: DP4756
Authors: Kai-Uwe Kuhn; Robert Stillman; Cristina Caffarra
Abstract: Theories of bundling have had great importance in European competition policy in recent merger control and abuse of dominance cases. Prominent examples include GE/Honeywell, Tetra Laval/Sidel and the recent Microsoft decision. The European Commission has been heavily criticized in all of those cases. In this Paper we attempt to sketch how a systematic approach to bundling cases can be structured. We first provide an overview of existing bundling theories, concentrating on robust economic mechanisms and their empirical implications. This allows us to develop a number of clear criteria to identify potentially anticompetitive bundling. We show that a careful reading undermines recently proposed arguments for a (modified) per se legality rule for bundling.
Keywords: bundling; efficiency defences; foreclosure; policy rules
JEL Codes: K21; L41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| bundling practices (L42) | anticompetitive effects (L41) |
| monopoly power + complementarity of goods + significant asymmetry in product lines (D42) | anticompetitive effects (L41) |
| bundling (L14) | reduced competition (L19) |
| bundling (L14) | less intense future competition (L19) |
| bundling strategies (L14) | deter future entry or innovation (L12) |
| bundling (L14) | network effects (D85) |
| network effects (D85) | reinforce dominant position (L42) |
| reinforce dominant position (L42) | decrease competition (L49) |