This paper analyzes the strategic decision to integrate by rms that pro- duce complementary products. Integration entails bundling pricing. We nd out that integration is privately pro table for a high enough degree of product di¤erentiation, that pro ts of the non-integrated rms decrease, and that con- sumer surplus need not necessarily increase when rms integrate despite the fact that prices diminish. Thus, integration of a system is welfare-improving for a high enough degree of product di¤erentiation combined with a mini- mum demand advantage relative to the competing system. Overall, and from a number of extensions undertaken, we conclude that bundling need not be anti-competitive and that integration should be permitted only under some circumstances.