One Bundle, Many Antitrust Laws: The Dilemma for Digital Products

by on April 29, 2005 · 2 comments

Recent news accounts on Steve Ballmer’s visit with Europe’s top antitrust official, Neelie Kroes, again brings to light the concept of software bundling. With Microsoft’s Longhorn operating system still 18 months away, we’ll have a little reprieve at least from more antitrust actions directed against MS (maybe). But what the operating system bundles (and what it doesn’t) will surely be the subject of legal attacks.

It can be easy to bundle digital products, but when is it illegal? This is a difficult question to answer, made more difficult when viewed against the global regulatory scale. In my recent article published in the Intellectual Property & Technology Law Journal, I argue that while it is easy to think of bundling as anticompetitive tying, economic justifications show that this fear is overblown. Consumers generally prefer bundled products because they offer convenience and more value for the money. That’s why EU regulators need to adopt a “rule of reason” approach toward antitrust tying cases. This is the approach that the U.S. has essentially adopted, and represents a more forgiving standard than the hard and fast per se rule.

Why bundle digital products? What are the consumer and regulatory misunderstandings toward technology bundling? What is tying, legally speaking? What’s the international impact? Answers to these and other titillating questions here.

  • Walter E. Wallis

    At the begining of WWII, the government ordered car makers, in a conservation move, to stop selling cars with a spare tire. This meant, back when 10,000 miles on a tiree was good, that you got to pay extra for what used to be bundled. Anybody wanna bet that unbundling software ain’t gonna help the customer either?

  • Walter E. Wallis

    At the begining of WWII, the government ordered car makers, in a conservation move, to stop selling cars with a spare tire. This meant, back when 10,000 miles on a tiree was good, that you got to pay extra for what used to be bundled. Anybody wanna bet that unbundling software ain’t gonna help the customer either?

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