Tying by Dominant Undertakings

1. Meaning and Concept

Tying is a competition-law practice in which an undertaking makes the purchase or availability of one product or service—the tying product—conditional upon the customer also obtaining another product or service—the tied product.

For example, if a company dominates the market for Product A and customers can obtain Product A only together with Product B, the arrangement may constitute tying. The central competition concern is that market power in Product A may be used to strengthen or protect the undertaking's position in the separate market for Product B.

Under EU competition law, tying by a dominant undertaking is principally examined under Article 102 TFEU, which prohibits the abuse—not the mere possession—of a dominant position. The European Commission's September 2026 Guidelines expressly address tying as a form of potentially exclusionary conduct.

Importantly, tying is not automatically unlawful. Bundling products can reduce costs, improve compatibility, simplify distribution, or benefit customers. Competition-law concerns arise where the conditions for abusive tying are established and the conduct is capable of harming the competitive process.

2. Tying and Bundling Distinguished

Although the expressions are sometimes used together, they are not exactly identical.

Tying normally means that customers seeking Product A are required to take Product B as well.

Pure bundling means that two products are offered only together as a package.

Mixed bundling means that the products remain available separately, but the undertaking also offers them together, usually under different commercial conditions.

For Article 102 purposes, the legal analysis focuses on the practical substance of the arrangement. A contractual requirement is therefore not always necessary. Technical integration or another commercial mechanism can potentially produce the required coercive effect.

3. Main Requirements of Abusive Tying

The case law, particularly Microsoft v Commission, provides the standard analytical framework. The principal elements are:

1. the undertaking is dominant in the market for the tying product;
2. the tying and tied items are separate products;
3. customers are coerced into obtaining the tied product together with the tying product;
4. the conduct is capable of restricting or foreclosing competition; and
5. there is no sufficient objective justification or efficiency explanation.

The Microsoft decision expressly dealt with Windows being supplied together with Windows Media Player and confirmed this framework.

Dominance in the tying market

The undertaking must first possess a dominant position in the relevant tying market. Dominance generally concerns substantial market power allowing an undertaking to behave to an appreciable extent independently of competitive constraints.

This requires defining the relevant product and geographic markets and examining matters such as market shares, barriers to entry, network effects, customer dependence and competitors' positions. The Commission similarly explains that Article 102 investigations first determine the relevant market and whether the undertaking is dominant.

Dominance in the market for the tied product, however, is not itself a necessary starting requirement.

4. Two Separate Products

There must normally be a tying product and a separate tied product.

One important indicator is whether there is independent customer demand for the tied product. Evidence that independent suppliers manufacture or sell the tied product separately can strongly support this conclusion.

This was particularly important in Microsoft. Windows operating systems and streaming media players performed different functions, while companies such as independent media-player suppliers offered players separately. The General Court treated those circumstances as evidence of separate consumer demand.

The Commission's 2026 Guidelines likewise state that the decisive question is essentially whether there is independent demand for the tied product without the tying product.

5. Coercion

The dominant undertaking must effectively make customers accept the tied product.

Coercion can arise through several mechanisms—for example, a contractual condition, refusing to supply the tying product separately, technical integration that prevents practical separation, or commercial arrangements having a comparable effect.

Microsoft provides an important illustration. PC manufacturers licensing Windows received Windows Media Player with it and could not obtain the relevant Windows product without the player. The Commission considered it irrelevant to the coercion question that customers did not necessarily pay a separately identified price for the player or were not required actually to use it.

Therefore:

Obtaining the product and using the product are different questions.

A customer may still be subject to tying even though the customer remains free not to use the tied product or to use a competitor's product as well. The current Commission Guidelines similarly recognize this distinction.

6. Foreclosure of Competition

The tying arrangement must be capable of adversely affecting competition.

The basic concern is leveraging: dominance in Market A may provide the undertaking with an artificial distribution advantage in Market B.

Suppose Firm X controls a product that millions of customers effectively need. If every purchaser automatically receives X's second product, competing suppliers of that second product may find it substantially harder to reach customers.

Microsoft demonstrates this concern particularly clearly. Windows Media Player obtained extremely broad distribution because it accompanied Microsoft's dominant operating system. The Commission found that this ubiquity could influence users, software developers and content providers and thereby reinforce network effects around Microsoft's media technology.

7. Objective Justification and Efficiencies

Even where the basic elements of tying exist, objective justification and efficiencies can be important.

Possible arguments can include genuine technical integration, improved security or interoperability, lower production or distribution costs, product-quality improvements, or other efficiencies benefiting customers.

However, simply asserting that two products work better together is insufficient. The justification has to be assessed against the actual conduct and its competitive effects.

The courts have also rejected attempts by dominant undertakings to exclude competing complementary products merely because the dominant company considers those products inferior. This principle appeared prominently in Hilti and subsequently influenced the analysis in Tetra Pak II.

Important Case Laws

1. Hilti AG v Commission — Case T-30/89

Court: Court of First Instance
Judgment: 12 December 1991

Hilti was an important early EU tying case involving nail guns and the consumable products used with them, particularly nails and cartridge strips.

Hilti sought to restrict customers' use of competing consumables with its equipment. The Court treated the relevant complementary products as sufficiently separate for competition-law analysis and rejected important aspects of Hilti's attempted justification.

The judgment is particularly significant for the principle that a dominant undertaking cannot simply reserve a complementary-product market to itself by requiring customers to use its own consumables.

The 2026 Commission Guidelines continue to cite Hilti when discussing separate products and coercion in tying cases.

Principle: Dominance over a primary product cannot automatically be used to exclude independent suppliers of separate complementary products.

2. Hilti AG v Commission — Case C-53/92 P

Court: Court of Justice
Judgment: 2 March 1994

Hilti appealed the earlier judgment.

The Court of Justice upheld the essential findings against Hilti. The litigation therefore became an important authority for Article 102 tying principles.

The case demonstrates that competition law can intervene where a dominant manufacturer attempts to extend control from its principal equipment into associated consumables.

Principle: Restrictions connecting dominant equipment with separately supplied consumables can constitute an abuse where they improperly foreclose independent suppliers.

3. Tetra Pak Rausing SA v Commission — Case T-83/91

Court: Court of First Instance
Judgment: 6 October 1994

Tetra Pak supplied packaging machinery and cartons used for liquid-food packaging.

Among several practices considered by the Commission and Court were arrangements linking machinery with Tetra Pak's own cartons. Customers could consequently face restrictions concerning their ability to obtain compatible cartons from alternative suppliers.

The case strengthened the approach developed in Hilti.

Of particular importance was the existence of independent production and demand for complementary consumables. The fact that two products are naturally used together does not necessarily turn them into a single product for Article 102 purposes.

Principle: Technical complementarity between two products does not by itself prevent them from being treated as separate products for tying analysis.

4. Tetra Pak International SA v Commission — Case C-333/94 P

Court: Court of Justice
Judgment: 14 November 1996

The Court of Justice largely confirmed the findings arising from the Tetra Pak proceedings.

A particularly important proposition from the judgment is that tied selling can potentially constitute an abuse even where commercial practice commonly connects the products or a natural link exists between them, unless the conduct is objectively justified.

The Commission's current Guidelines continue to cite Tetra Pak in explaining the tying framework.

Principle: Commercial custom or a natural relationship between products does not automatically immunize tying by a dominant undertaking.

5. Microsoft Corp. v Commission — Case T-201/04

Court: Court of First Instance/General Court
Judgment: 17 September 2007

This is one of the most important modern EU judgments concerning tying.

Microsoft held a dominant position in client PC operating systems and supplied Windows Media Player (WMP) together with Windows.

The Court examined four central issues:

• Microsoft's dominance in client PC operating systems;
• whether Windows and WMP constituted separate products;
• whether customers could obtain Windows without simultaneously obtaining WMP; and
• whether the arrangement was capable of foreclosing competition.

The Court found substantial evidence of separate demand for media players. Independent companies supplied standalone media players, and operating systems and media players fulfilled distinguishable functions.

Microsoft's distribution mechanism also gave WMP an important competitive advantage: the media player could obtain extremely widespread presence through Windows rather than having to achieve equivalent distribution independently.

The General Court therefore upheld the Commission's central tying finding.

Principle: Technological integration does not automatically escape Article 102. The courts can examine whether separate demand exists and whether integration by a dominant undertaking forecloses competing products.

6. Google Android — Commission Case AT.40099

Decision: European Commission, 18 July 2018

Although a Commission decision rather than a Court judgment in its original form, the Android proceedings are highly important to modern tying analysis.

The Commission examined Google's contractual arrangements concerning Android mobile devices, including conditions relating to Google's search and browser applications.

One relevant issue was whether device manufacturers wishing to obtain certain Google applications were required to pre-install additional Google applications.

The Commission applied the established tying framework and considered dominance, separate products, coercion and competitive foreclosure. Its decision also emphasized that coercion can exist even where users remain free to use competing products.

Principle: Tying principles can apply to digital ecosystems where applications are linked through licensing or pre-installation conditions rather than through traditional physical-product sales.

7. Microsoft Windows Media Player Commission Decision

Commission Decision 2007/53/EC, arising from the Microsoft proceedings, is also important because it clearly organizes the tying test.

The Commission identified four central elements: Microsoft was dominant in PC operating systems; Windows and WMP were separate products; customers lacked a choice to obtain Windows without WMP; and the arrangement was capable of foreclosing competition.

The subsequent General Court judgment in T-201/04 largely validated this tying analysis.

Principle: The structure of modern EU tying analysis can be understood through dominance + separate products + coercion + foreclosure, subject to objective justification.

Tying in Digital Markets

Tying has become especially significant in digital markets because products can be integrated through software rather than physically packaged together.

A dominant digital platform might connect its core service with its browser, search service, payment system, application store, cloud product or other complementary service.

This can create powerful effects because digital markets frequently involve network effects, economies of scale, default settings and ecosystem dependence.

For example:

Dominant Operating System → Bundled Application → Automatic Distribution → Reduced Opportunity for Rival Applications → Potential Foreclosure

Microsoft illustrates how automatic distribution can matter even when competing software technically remains available for installation.

Competitive Harm

Tying can potentially harm competition in several related ways.

It may foreclose competitors in the tied-product market because rivals must persuade customers to replace or supplement something they already received automatically.

It can raise entry barriers, because new firms need to develop an independent distribution channel.

It may also reinforce network effects. If widespread distribution attracts developers, advertisers or content providers, the tied product can become progressively more attractive.

Finally, tying may allow the undertaking to protect or extend market power from one market into an adjacent market.

The legal concern, however, is not simply that a dominant undertaking sells several products together. The inquiry concerns whether the particular arrangement is capable of restricting competition.

Remedies

Where tying infringes Article 102 TFEU, competition authorities can require the undertaking to terminate the abusive arrangement.

Depending on the circumstances, remedies may include allowing the tying product to be obtained without the tied product, changing contractual or licensing conditions, permitting customers or manufacturers greater choice, removing technical restrictions, or imposing financial penalties.

The Microsoft proceedings are an important example: the remedy included requiring a Windows version without Windows Media Player.

Conclusion

Tying by dominant undertakings occurs when a company uses its position in a tying-product market to require customers to obtain a separate tied product under circumstances capable of restricting competition.

The leading EU authorities—Hilti, Hilti on appeal, Tetra Pak, Tetra Pak II, Microsoft, and the Google Android proceedings—show the evolution of the doctrine from industrial equipment and consumables to software and digital ecosystems.

The core legal inquiry can be summarized as:

Dominance + Separate Products + Coercion + Capability to Foreclose Competition − Objective Justification/Efficiencies = Potential Abusive Tying under Article 102 TFEU.