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.