From the Editor: Spring 2005

Welcome to the first issue of Competition Policy International. This inaugural volume begins with a colloquy about tying, an unsettled area in both economics and law. The Chicago School taught that even firms with monopoly power were not likely to find tying attractive because it could not augment their market power. Later writers, however, have identified conditions under which firms might tie to create an additional monopoly or protect their current one. But it has been hard to find robust methods for identifying anticompetitive ties. In most countries the law has taken a less forgiving approach to tying than the economics literature. To paraphrase U.S. Supreme Court Justice Frankfurter: there’s nothing redeeming about tying. Such skepticism led U.S. courts for many years to make tying by firms with market power a per se violation. This doctrine has been relaxed slightly over time, but tying is still treated much more harshly than other unilateral practices. There is an ongoing debate in the competition policy community on whether tying with market power should remain essentially per se illegal, be made lawful as the Chicago School urged, or be subject to some sort of rule of reason analysis.

The lead article by Jean Tirole and thoughtful comments by Dennis Carlton and Michael Waldman and by Barry Nalebuff offer recommendations for going forward from four economists who have made seminal contributions to the scholarly literature on tying and its effects. This issue