The Antitrust Theory That Slept for 55 Years

What if you have a monopolist who, technically, allows customers to buy a product separately, but prices the standalone product so high that the only economically sensible thing to do is to take the bundle? That is the premise of **constructive tying**, an antitrust theory that was accepted decades ago but not often used since the early 1970s. The theory has been reinvigorated by the Second Circuit in Cumulus Media v. Nielsen. Cumulus was buying some local ratings from a competitor while trying to get Nielsen’s national radio ratings. Eventually Nielsen offered the national product separately but at a much higher price. This episode explains why constructive tying has largely fallen out of favor, why the facts in *Cumulus* were different, and why the decision could provide future plaintiffs with a modern roadmap for challenging pricing structures that effectively force customers into bundles.The bigger lesson is that bundle discounts or high prices are not illegal in and of themselves. What antitrust law may sometimes do is look beyond whether a customer is technically free to choose and ask whether that choice is economically real.Read the full article and graphic analysis: https://blog.econworks.com/p/the-antitrust-theory-that-slept-for?r=562wriExplore more visual economics content: https://econworks.comYouTube: https://www.youtube.com/@EconWorks-d3eSubstack: https://blog.econworks.com This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe