Should Firms Bundle Bloatware with Consumer Electronics? - Implications for Product Pricing and Consumer Surplus

This paper investigates bloatware bundling and product pricing decisions of a monopolistic firm when consumers can remove the bloatware from their electronic devices after purchase. We show conditions under which it is optimal for the firm not to bundle bloatware with their products. Furthermore, we show that even if the firm can make it harder for consumers to remove bloatware, the firm is not always better off by doing so. Consumers do not necessarily benefit from a reduced cost of bloatware removal either. In particular, if the reduction in the removal cost triggers the firm to change either its bloatware-inclusion strategy or its pricing strategy, the reduced removal cost may hurt consumers.