Multiproduct activity and competition policy: The Tetra Pak case

Garcia-Gallego, A. and Georgantzis, N. (1996) Multiproduct activity and competition policy: The Tetra Pak case. European Journal of Law and Economics, 3 (1). pp. 83-95. ISSN 0929-1261 doi: 10.1007/BF00149084

Abstract/Summary

We propose the Tetra Pak case as a real-world example to study the implications of multiproduct activity for European Competition Policy. Tetra Pak, a monopolist in aseptic carton packaging of liquid food, competes with Elopak in the nonaseptic sector. The EC Commission used the effect of Tetra Pak's dominance in the aseptic sector on its rival's performance as an evidence of the former's anticompetitive behavior. With linear demand and cost functions and interdependent demands, the Commission's position can be supported. However, a more general model suggests that the Commission's conclusions cannot be supported as the unique outcome of the analysis of the information available.