Re: bundling is inherently unfair to consumers

["Lewis A. Mettler" <lmettler@lamlaw.com>]

Norm,

Norm wrote:
> 
> On Tue, 14 Dec 1999 00:27:38 -0500 (EST), Lewis A. Mettler wrote:
> 
> >> >    In summary, it is simply not possible to say _truthfully_
> >> >    that bundling is _always_ harmful to consumers.
> >>
> >> I expect Lewis will clarify this, but my impression is that when he
> >> says "bundling" he means force-bundling.
> >
> >If the tires only come with a pound of beef, then it would be a bundle.
> >
> >And, of course, all vegetarians would really complain.
> >
> >However, the real fallacy in the example is caused by the fact that the
> >tire company does not have a monopoly at all.  No tire company does.
> >And, as I recall, the example did not say that tires were only sold with
> >the pound of beef.  If it is only a come-on then that might be
> >advertising.
> >
> 
>      AH..HA!!!  So now you're *FINALLY* getting it (albeit probably
> without realizing it yourself).  You've been arguing about how *ALL* or
> *ANY* bundling is harmful to consumers (and have even gone as far as to
> claim it's against some unwritten 'consumer right'), but now you've
> qualified it by stating that it's different when done by a
> monopolist...with *THIS* I can agree.  

It is different.  When a monopolist does it, it is also illegal.

But, fairness and harm is determined from the perspective of the
consumer.

There is in fact a lot of bundling which is not illegal.  But, that does
not make it fair nor harmless.

If you want to know if bundling is fair, break down the consumers into
appropriate classes and ask them.

Offer them a discount or sell separate products separately and see what
they do.

Microsoft Word is offered separately simply because a lot of customers
only want and need the word processor and do not want to be forced to
buy the suite, right?

You really should ask those customers who buy just Word whether they
would consider it unfair or harmful if only the Pro Suite with Access
were available for purchase.

Go ahead. Ask them.  They will most likely tell you they will switch to
WordPerfect. Do you see a comparison here with the bubblegum deal?


> This distinction (a monopolist)
> is the defining issue, but to use it as an example for non-monopolistic
> products is to engage in what we use to call 'pseudo-deductive
> reasoning'.

No. Not at all.

I have always separated what was illegal and what was only unfair or
harmful.

A legal act is not necessarily fair nor harmless.  To be illegal, a
monopoly must be proven.  To be unfair or harmful, you only need to ask
consumers what they think.

For this reason, I have separated out consumers into certain classes. 
In that way, you can easily understand how and why certain classes would
find the act of bundling unfair or harmful regardless of whether it is
illegal or not.

Have you even bothered to ask a consumer without need for a modem if
they want to buy browser technology?  If not, did you bother asking if
they want a word processor or not?  Or, do you just force them to buy a
particular brand of one regardless of their needs?  If so, I hope you do
not hold out yourself as a consultant.  Consultants always ask the
customer what they need as their first step. Too many people on this
list suggest that the consumers should be flatly ignored and told what
they must buy.

If you are still confused, read the findings of facts.  Illegal bundling
acts almost always are unfair and harmful to consumers.  However, that
does not mean that legal acts are not harmful or unfair.  Remember your
logic class?  The converse of a true statement is not always true?

-- 
Lewis A. Mettler, Esq.(Attorney and Software Developer)
lmettler@LAMLaw.com
http://www.lamlaw.com/ (detailed review of the Microsoft antitrust
trial)