Notes et baromètres

Does the tying and bundling of products harm consumers?

Economic Note / March 2006

Since two years Microsoft has been under judgment for “dominant position abuse.” How is it that the European Commission, a supposed supporter of market reforms, launches itself out in such a battle? Far from regarding the introduction of the free market as the best means of making the interests of consumers prevail over the particular interests of producers, the Commission considers that “market forces” must be channeled. When a firm is in a dominant position, it can exclude competitors thanks to practices known as restrictive practices, such as the tying or the bundling of several products in one sole “package.” A firm seizing such opportunities harms the consumer by depriving him of more satisfactory solutions that the excluded competitors would have proposed to him.

Etiquettes

L’Institut économique Molinari

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