Tying and bundling in the digital era

Abstract:

Hardly any doctrine of competition law has been modified more significantly by digitization than tying and bundling. While it was originally developed for the combined sale of two products, this concept was recently applied to cases like software integration or the prioritized display in search engine rankings.

Against this backdrop, this paper seeks to shed some light on the reasons that let the concept of tying and bundling evolve in the digital context. On the basis of Post-Chicago School concepts, it is argued that digital markets are particularly vulnerable to tying and bundling practices. This led to a broadening of the scope of the doctrine of tying and bundling: It may be applied to all cases where consumers are nudged to demand a supplementary product, thereby foreclosing the market for this supplementary product. In the context of digital markets, the doctrine tying and bundling thus evolved into a general theory of leveraging.