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ARTICLE · 15 DECEMBER 2008

Product Bundling: The Implications Of The Recent Baxter Decision

DLA Piper Australia
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The Full Federal Court has recently issued its decision in ACCC v Baxter Healthcare. This decision has significant implications for any firms that are considering bundling products.

AustraliaAntitrust/Competition Law
Richard Owens
Richard Owens
Simon Uthmeyer
Simon Uthmeyer

The Full Federal Court has recently issued its decision in ACCC v Baxter Healthcare. This decision has significant implications for any firms that are considering bundling products. It is particularly relevant where a firm is bundling one product in relation to which it has a high market share with another product for which it faces greater competition.

IMPLICATIONS OF THE BAXTER DECISION

ACCC v Baxter Healthcare Pty Ltd is the first time that bundling has been found to be a misuse of market power under section 46 of the Trade Practices Act. The Full Federal Court's decision on 11 August 2008 illustrates the risks involved in implementing a bundling strategy. In particular, it shows that if you have market power in relation to one product, then you may need to be extremely careful when offering discounted pricing in return for an exclusive (or near exclusive) deal for that product and another product for which you face greater competition.

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