A Tying Perspective on Apple, the iPhone, and the App Store

Significant attention has recently been paid to Apple’s behavior concerning the iPhone and App Store. In this paper, I employ economic theory concerning tying behavior to better understand the economic forces behind Apple’s behavior, and the extent to which intervention is justified. I identify three plausible motivations for Apple’s behavior – efficiency, price discrimination, and leveraging its market power – and discuss what each suggests concerning whether intervention is justified