Assessing the Competitive Effects of Bundling: The Australian Experience
1 July 2004
By Greg Houston and Carol Osborne
Bundling has become one of the most controversial and highly debated topics in antitrust and competition policy. In the wake of the European Commission's decision to block the proposed merger of General Electric Company and Honeywell International, Inc., in 2001, this is no surprise. And recent judicial opinions in LePage's Inc. v. 3M have raised important questions regarding the antitrust implications of a broad-based business strategy that pervades all sectors of the US economy.
In this chapter from Economics of Antitrust: New Issues, Questions, and Insights, NERA Director Greg Houston and Senior Consultant Carol Osborne explain that bundling is just as controversial in Australia as it is in the United States. For example, bundling by some of Australia's telecommunications companies led the Australian Competition and Consumer Commission (ACCC) to study the industry and the practice of bundling in great depth. In August 2003, the ACCC released its final report. As the authors explain, the challenge for the ACCC is to identify and prohibit bundling arrangements that harm consumers without stifling innovation and competition.
