Incremental price that varies as between customers 194. As the amounts acquired of the various products that are part of the bundle may differ from customer to customer, the incremental price may also differ from customer to customer. In order to understand the foreclosure effect of a given multiproduct rebate scheme, an assessment of the effect of the rebate on the incremental price paid by the various customers may therefore be necessary. If there are few customers in a market, this may be relatively straightforward. If there are many customers it may be necessary to look at various customer groups with similar purchasing behaviour and assess the incremental price for each of these groups. It may be a useful starting point to look at the market as a whole and calculate whether the “incremental market price” for the product covers the long run incremental costs for this product. However, as mentioned below, any analysis of the market-wide foreclosure effect also will need to pay attention to whether the multi-product rebate ties customers that are particularly important for the entry or expansion of rivals or whether the multi-product rebate is targeting the customers of specific competitors.
If Domco and competitors sell similar bundles 195. If the competitors to the dominant company sell similar bundles it may be less relevant to consider whether the incremental revenue covers the incremental costs for each product in the bundle. Such a situation is better seen as bundle competing against bundle and the relevant question is then whether the price of the bundle as a whole is predatory using the methodologies described in section 6.
Aspect 2 of tying and bundling – is whole market foreclosed? 196. The second part of the assessment is to establish whether the market as a whole can be considered to be foreclosed. The analysis of the foreclosure effect will take into account several factors. In general, the higher the tied percentage of total sales on the tied market, the
larger is normally the foreclosure effect. However, the overall strength of the dominant company on both the tying and the tied markets should also be taken into account. Another important factor is the identity of the tied customers. For example, some customers may be important from an entry-deterring point of view in that they would be most likely to be responsive to offers from