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COMPETITION • EUROPEAN LAW • ABUSE OF DOMINANT POSITION
According to the Commission's Guidance on abusive exclusionary conduct (2009/C 45/02), a dominant undertaking may try to foreclose its competitors by tying or bundling. Tying occurs when the sale of a given product, the tying product, is made contingent upon the purchase of another product, the tied product, by the dominant undertaking. The practice may have a technical or contractual basis. Tied selling occurs for technical reasons when the tying product is designed in such a way that it functions properly only with the tied product. Contractual tying arises when the purchaser of the tying product undertakes to also purchase the tied product. Technical tying occurs when the tying product is designed in such away that it only works properly with the tied product. Contractual tying occurs when the customer who purchases the tying product undertakes also to purchase the tied product.
The concept of "bundling" usually refers to the way products are offered and priced by the dominant undertaking. In the case of pure bundling, the products are only sold together in fixed proportions. In the case of mixed bundling, also referred to as "multi-product rebate", the products are made available separately, but the sum of the prices of each product is higher than the total price resulting from the bundling.
Tying and bundling practices may fall within the scope of Article 102 TFEU when they are likely to foreclose the market for the other products that are the subject of the tied or bundled sale, i.e. the tied market and, indirectly, the tying market. To be capable of constituting an infringement, the undertaking must be dominant on the tying market, but not necessarily on the tied market. In bundling cases, the undertaking must be dominant in one of the bundled markets. In the specific case of tying in after-markets, the undertaking must be dominant in the tying market and/or the tied after-market. In addition, the tying and tied products must be distinct products and the tying practice must be likely to lead to anticompetitive foreclosure.
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