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Ted Frech, Jun 10, 2008
Bundling and related exclusionary practices are both common in the economy and often challenged under the antitrust laws. The following remarks highlight a few issues. This is not a complete discussion of these issues, let alone a complete treatise on the economics of bundling. This paper is organized as follows:
- Section I: Bundling practice that raise antitrust concerns rarely involve sales to final consumers
- Section II: The main underlying economic issue is exclusive dealing broadly defined
- Section III: Exclusive dealing practices can have pro-competitive, anticompetitive, or neutral effects
- Section IV: The Antitrust Modernization Commission’s three-pronged test
- Section V: Exclusionary practices often have a cumulative effect
- Section VI: The “equally efficient rival” idea is tricky in practice
- Section VII: Distinguishing procompetitive from anticompetitive exclusive dealing is difficult
- Section VIII: Conclusion
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