Testimony on Bundled Discounts for DOJ/FTC Hearings on Single-Firm Conduct and Antitrust Law

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Thomas Lambert, Nov 29, 2006

On November 29, 2006, Thomas Lambert presented testimony before the U.S. Department of Justice and Federal Trade Commission at the Public Hearing on Single-Firm Conduct and Antitrust Law. Below is an excerpt from his testimony:

Bundled discounts present a classic example of what Judge Easterbrook calls “the puzzle of exclusionary conduct.” That puzzle exists because “competitive and exclusionary conduct look alike,” and it is often difficult for courts to condemn the latter without discouraging the former. With respect to bundled discounts, it can be difficult to tell which are procompetitive (i.e., which ones reflect efficiencies and/or represent a whittling away of supracompetitive prices) and which are likely to injure consumers in the long run by driving out those rivals whose continued presence in the market is desirable. The “puzzle,” then, is to develop an easily administrable evaluative approach that will identify and condemn only those bundled discounts that could injure consumers by excluding rivals that are, or are likely to become, as efficient as the discounter. The evaluative approach proposed in these remarks provides a plausible solution to the puzzle.

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Testimony on Bundled Discounts for the DOJ/FTC Hearings (Nov. 29, 2006)