Tying : An Economic Analysis of the Google-android Case

Motivated by the recent antitrust investigations concerning the Google-Android case, this dissertation develops a theoretical model of bundling with compatibility costs based on the model of Cornière and Taylor (2018) adapted to Google’s tying practices in smartphone pre-installed applications. Our...

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Bibliographic Details
Main Author:	de Andrade, João Tadeu Fonseca
Format:	Dissertation
Language:	English
Published:	ProQuest Dissertations & Theses 01-01-2019
Subjects:	Antitrust laws Computer science Consumers Contract negotiations Corporate profits Costs Credibility Customer services Decision making Economic activity Economics Fees & charges Foreclosure Internet Internet and social media studies Law Management Market positioning Market shares Operating systems Predatory pricing Product differentiation Regulation Resale price maintenance Sales Search engines Web studies
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Summary:	Motivated by the recent antitrust investigations concerning the Google-Android case, this dissertation develops a theoretical model of bundling with compatibility costs based on the model of Cornière and Taylor (2018) adapted to Google’s tying practices in smartphone pre-installed applications. Our model incorporates the specificities of the alleged efficiencies that Google claims to have when its applications are installed together and demonstrates the incompatibilities that rival’s apps have when they are pre-installed. This dissertation aims to examine how the anticompetitive effects and the optimal decision of tying or pure bundling are affected by the introduction of synergies and compatibility costs. The results demonstrate that bundling produces the same anticompetitive effect regardless of the synergies that the monopolist has when its components are installed together, and the synergy does not rely solely on bundling in order to be realized. However, the synergy makes bundling a more optimal strategy, since the downstream firm bears the compatibility cost and rivals have more difficulties to install their components. Furthermore, we modified the sequence of negotiations and obtain the same results as in the original model: bundling continues to be strictly necessary to capture the global value of the tying component and reduces rival’s willingness of paying slotting fees, regardless if its rival decide secondly its slotting fee. This dissertation attempts to provide additional insights on existing conflicts about EU competition policy action regarding tying practices and provide additional information on the determinants of the optimality of tying and its consequences to competition.
ISBN:	9798382411002