Volume 40 (2017) / Issue 3
This article constitutes a direct challenge to applying cost tests as the sole liability test for multiproduct discounts. The article utilizes Neoclassical Price Theory to isolate the methods by which mixed bundling can harm consumers by viewing the practice as a form of predation, then alternatively as tying.1Under tying, the article considers market power and the conditions aside from the aggregate amount of price cuts that must exist for coercion to produce anticompetitive foreclosure. Such factors determine the contestability of demand in the linked market. The article lastly recommends an alternative test that aims to maximize welfare by focusing the analysis on overlapping demand, contestability, the EU cost test, and the benefit of the discount to package purchasers.
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