![]() We have a modest proposal and a radical one. (6) A rule of reason analysis is the appropriate framework for conducting the factual analysis described in points (4) and (5). (5) One must also conduct a factual analysis to determine whether tying has procompetitive effects-again economic theory by itself only says that tying might be efficient however the pervasiveness of tying in competitive markets provides considerable support to the existence of these efficiencies generally. (4) One must conduct a factual analysis to determine whether tying has anticompetitive effects-economic theory by itself only says that tying might be anticompetitive (in the same sense that owning a knife might enable one to engage in lethal actions). (3) No economic theory finds that market power (or dominance) is a sufficient condition for tying to have anticompetitive effects nor does any economic theory find that market power and the absence of separate demand are sufficient conditions for tying to have anticompetitive effects (the Jefferson Parish test). ![]() (2) The economic literature finds that tying may have anticompetitive effects (putting possible efficiencies to one side) when certain necessary conditions hold market power is just one of those necessary conditions. The argument is as follows: (1) Tying is so common in competitive markets that it must provide efficiencies economic theory identifies many possible sources of these efficiencies. In this article, we show that modem economic thinking supports a rule of reason approach toward tying. 4 European Community (EC) law has not experienced a similar movement to a recognition that even firms with market power may enter into tying without harming and possibly benefiting consumers. Circuit Court of Appeals, to take the efficiency effects of tying into account, adopted a rule of reason approach to the analysis of tying cases with respect to computer software platforms. 3 In its 2001 decision in Microsoft III, the D.C. They have taken a hostile approach towards tying under the assumption that "tying agreements serve hardly any purpose beyond the suppression of competition." 2 With the United States Supreme Court's decision in Jefferson Parish in 1984, however, the United States law on tying adopted a modified per se illegality rule that recognizes the welfare enhancing effects of tying. This could happen when the tying firm enjoys monopoly power and tying leads to the exclusion of competitors it could not happen when the tying firm lacks significant market power.įor a long period of time, competition laws on both sides of the Atlantic failed to recognize that tying involves costs and benefits. The pervasiveness of tying in the economy shows that it is generally beneficial-it could not survive in competitive markets if it were not. It may also reduce transaction and information costs for consumers and provide them with increased convenience and variety. Tying may result in lower production costs. The other robust statement about tying is that it typically involves both costs and benefits. This is true because every product or service could be broken down into smaller components capable of being sold separately, and every seller refuses at some point to break the product down any further. Bork noted in his famous book,Įvery person who sells anything imposes a tying arrangement. Consider the following examples: shoes are sold in pairs hotels sometimes offer breakfast, lunch or dinner tied with the room there is no such a thing as an unbundled car and no self-respecting French restaurant would allow its patrons to drink a bottle of wine not coming from its cellar. ![]() The most robust statement one can make about tying is that it is ubiquitous. Tying exists when the seller of a product requires his purchasers to take another product as well. The antitrust economics of tying: a farewell to per se illegalityīY CHRISTIAN AHLBORN, * DAVID S. The Antitrust Bulletin/Spring-Summer 2004 The antitrust economics of tying: a farewell to per se illegality Christian Ahlborn David S Evans A Jorge Padilla Antitrust Bulletin Spring 2004 49, 1/2 ABI/INFORM Global pg. ![]() For an official signed copy, please contact the Antitrust Documents Group. To view the PDF you will need Acrobat Reader, which may be downloaded from the Adobe site. This document is available in two formats: this web page (for browsing content) and PDF (comparable to original document formatting).
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |