In the Epic v. Apple case, the U.S. court ruled that Apple violated antitrust laws and prohibited it from bundling platform service product and payment service product. This paper establishes a theoretical model of a monopoly platform providing two types of service products (platform service and payment service). Assuming that platform service product operates in a two-sided market and payment service product in a one-sided market, the analysis focuses on the best bundling strategy for platform and impact of the platform's bundling strategy on the prices of platform service product, the price and quality levels of payment service product, and consumer surplus.
This paper finds that when the degree of consumers' negative perception of platform service product is relatively low, the platform necessarily adopts a bundling strategy. Furthermore, when the degree of consumers' negative perception of platform service product is relatively high, the platform's incentive to bundle decreases in the degree of negative perception. The platform's bundling strategy leads to an increase in the pricing for developers of platform service product, ambiguous on consumer-side pricing, and an increase in the number of users on both sides of the platform service product. Additionally, bundling improves the quality level of payment service product, but ambiguous changes in price and user numbers. Lastly, the impact of the platform's bundling on consumer surplus mainly depends on the upper bound of the marginal utility of quality for payment service product. When this upper bound is relatively low, bundling necessarily enhances consumer surplus.
