Economics: Microsofts Bundling/Tying arrangement

Microsoft 's Bundling and Tying Arrangements

Introduction

One of the world 's largest company in terms of market capitalization and owned by one wealthiest persons in the world today , Microsoft company is the leading provider of computer operating systems across the globe . The Microsoft Windows is a close source operating system that innovated and promoted the use of computers by simplifying and making the operation of computers as easy as one two three . In early 2000 , the Microsoft was astounded by an anti trust case lodged against its bundling and trying

arrangements which it eventually lost . Microsoft 's marketing strategy was alleged to have promoted unfair market competition which in turn stifles innovation in a highly innovative IT industry . This will attempt to briefly elaborate the economic and legal aspects of the Bundling / Tying market strategy of Microsoft

Bundling and Tying

Bundling is the practice of packaging at least two products together The products are either sold jointly or if sold separately , discounts are given to the other relative to their individual prices . Tying on the other hand is synonymous to bundling as it involves requiring the purchaser of one product to also purchase a second product (Carlton and Perloff ) The practice of tying and bundling is a common economic strategy that is implemented across different industries especially in marketing consumable products that compliments a major product . For instance , the Ink cartridge is tied up with its printer or in case of mobile service providers providing bundled services that...