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Bundles of Trouble: The Possibilities for a New Separate-Product Test in Technology Tying Cases |
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Samuel Noah Weinstein |
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| Under current Supreme Court tying precedent, a tying violation can only exist if there are two separate products involved. In technologically-dynamic markets, however, it is often difficult to determine if a bundle of goods is one product or more. The best-known example of such a bundle is Microsoft's Windows-Internet Explorer package. Microsoft claims that this bundle is one integrated product, while the Department of Justice has argued that it is two tied products. The recent Microsoft litigation has underscored the significant problems with the Supreme Court's current tying regime. These problems stem from the per se nature of the violation and from the difficulty of determining whether a bundle is one product or two. Recent economic scholarship has demonstrated that tying can have both pro- and anticompetitive effects and that therefore a per se rule is inappropriate. The severity of these problems was clearly illustrated by the D.C. Circuit's decision to ignore relevant Supreme Court precedent and declare a new standard for judging specific types of tying arrangements in Microsoft III. Judges and scholars have proposed a wide range of rules for replacing the current tying regime. These rules fall into two broad categories, proxy-tests, which rely on variables such as consumer demand to indirectly determine whether a bundle is anticompetitive, and economic measurement tests, which attempt to directly measure the economic costs and benefits of bundles. This Comment analyzes these various proposals and concludes that current proxy tests, while judicially manageable, will not always accurately evaluate the competitive effects of bundles and that economic measurement tests, while potentially offering more accuracy, lack judicial manageability. This Comment argues that current proxy tests as applied in Microsoft III and Jefferson Parish rely on an unnecessarily narrow analysis. The Comment further argues that an improved proxy test can be developed, one that can accurately differentiate anticompetitive from procompetitive bundles, that is judicially manageable, and that has the advantage of being a natural extension of, rather than a break with, current tying precedent. The Comment proposes such a test and applies it to the Microsoft III facts. | |
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© [year] by California Law Review, Inc. |
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