Download or read book Two Sided Platform Markets and the Application of the Traditional Antitrust Analytical Framework written by Renata B. Hesse and published by . This book was released on 2007 with total page 6 pages. Available in PDF, EPUB and Kindle. Book excerpt: It only takes working through a single matter that involves a two-sided market to recognize that the antitrust analysis can be a bit more complicated than with standard one-sided markets. The principle reason for the complication is evident from the descriptive moniker given these markets: they have two sides or, put more practically, they have two sets of independent customers. Generally, two-sided markets are characterized by(1) the presence of two distinct classes of customers for a vendor's product or service, both of which are necessary for the existence of the product or service, and(2) indirect positive externalities between different classes of customers, meaning that the value of the product or service to one class of customer increases with the level of usage by the other customer class, at least up to a point.But why do these features make a difference in terms of the application of standard antitrust principles to these markets? Or, more colloquially, why is everyone talking about two-sided markets?
Download or read book Two Sided Market Literature Enriches Traditional Antitrust Analysis written by William H. Rooney and published by . This book was released on 2007 with total page 10 pages. Available in PDF, EPUB and Kindle. Book excerpt: The term two-sided market sounds strange to the antitrust lawyer's ear. Antitrust markets typically are not described as having sides. They consist of a relevant product or set of products, cover a geographic area, and include transactions between buyers and sellers at a particular level of distribution (e.g., manufacturing, wholesale, retail). Although most market participants buy inputs and sell outputs, they usually buy in the market for the input and sell in the market for the output, not compete in a two-sided market.Still, the growing and informative literature on two-sided platforms, businesses, and markets has much to offer antitrust law. That literature emphasizes that the demand for otherwise distinct products or services may in fact be linked and that a competitive-effects analysis cannot myopically ignore that linkage. To the extent that the two-sided market literature improves competitive-effects analysis, it improves the fundamental purpose of antitrust law.This essay briefly discusses the importance of acknowledging linked demand for, and relationships among, otherwise distinct products or services, as recommended by the two-sided market literature, with respect to competitive-effects assessments and market definition. We also observe that recognizing linked demand and interrelationships among products or services facilitates the application of legal rules in antitrust cases.
Download or read book The Antitrust Paradox written by Robert Bork and published by . This book was released on 2021-02-22 with total page 536 pages. Available in PDF, EPUB and Kindle. Book excerpt: The most important book on antitrust ever written. It shows how antitrust suits adversely affect the consumer by encouraging a costly form of protection for inefficient and uncompetitive small businesses.
Download or read book Analyzing Market Definition and Power in Multi Sided Platform Markets written by Michael D. Noel and published by . This book was released on 2015 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: The SSNIP test and Critical Loss Analysis are widely used tools for determining market definition in merger and sometimes other antitrust matters. However, the standard techniques used to test for a relevant antitrust market are incorrect when the firms in question operate two-sided platforms. When a two-sided platform raises price on one side of its business, it negatively impacts both sides iteratively. We show how Critical Loss Analysis can be extended to the case of two-sided platforms and drive formulas for its implementation. We perform comparative statics to show that the bias from the misuse of one-sided formulas in a two-sided setting can be large.
Download or read book Essays on the Economics of Two Sided Markets written by David S. Evans and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume collects a series of essays that I have written over the last decade on businesses that create value by providing products that enable two or more different types of customers to get together, find each other, and exchange value. Part I presents background pieces on the economics of multi-sided platforms and industries in which these platforms are common. Part II examines the antitrust economics of two-sided markets including defining the difficult problem of defining the boundaries of competition. Part III comprises several papers that apply two-sided market analysis to web-based businesses. Part IV does the same for payment cards which is the industry that attracted much of the early two-sided analysis - in part because this framework was helpful for understanding the hotly debated issue of interchange fees. Part V collects several article and book chapters on software platforms. These platforms have become especially important in the last several years because they are now the basis for revolutionary developments with mobile devices (e.g. the iPhone and Android), social networking (Facebook in particular), and payments (PayPalX). The essays are published as originally written (usually, in fact, whatever version could be made freely available). The book itself consists of a series of urls (website addresses) that enable the reader to download these papers.
Download or read book Market Definition and Market Power in Payment Card Networks written by Eric Emch and published by . This book was released on 2006 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Big Data and Competition Law written by Alptekin Koksal and published by Taylor & Francis. This book was released on 2023-11-13 with total page 157 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent studies on competition law and digital markets reveal that accumulating personal information through data collection and acquisition methods benefits consumers considerably. Free of charge, fast and personalised services and products are offered to consumers online. Collected data is now an indispensable part of online businesses to the point that a new economy, a data-driven sector, has emerged. Many markets such as the social network, search engine, online advertising and e-commerce are regarded as data-driven markets in which the utilisation of Big Data is a requisite for the success of operations. However, the accumulation and use of data brings competition law concerns as they contribute to market power in the online world, resulting in a few technology giants gaining unprecedented market power due to the Big Data accumulation, indirect network effects and the creation of online ecosystems. As technology giants have billions of consumers worldwide, data-driven markets are truly global. In these data-driven markets, technology giants abuse their dominant positions, but existing competition law tools seem ineffective in addressing market power and assessing abusive behaviour related to Big Data. This book argues that a novel approach to the data-driven sector must be developed through the application of competition law rules to address this. It argues that current and potential conflicts can be mitigated by extending the competition law assessment beyond the current competition law tools to offer a modernised and unified approach to the Big Data–related competition issues. Promoting new legal tests for addressing the market power of technology giants and assessing abusive behaviour in data-driven markets, this book advocates for cooperation between competition and data protection authorities. It will be of interest to students, academics and practitioners with an interest in competition law and data protection.
Download or read book ANTITRUST ANALYSIS OF PLATFORM MARKETS written by David Sparks Evans and published by . This book was released on 2019-12-16 with total page 210 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book compiles a set of pieces on the implications of the U.S. Supreme Court's ruling in Ohio et. al. v. American Express and the preceding litigation for the treatment of multisided platforms under U.S. antitrust law. The authors consider that the Supreme Court ruling provides valuable guidance for antitrust analysis in such markets.
Download or read book Industrial Organization of Markets with Two Sided Platforms written by Richard Schmalensee and published by . This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Many diverse industries are populated by businesses that operate two-sided platforms. These businesses serve distinct groups of customers who need each other in some way, and the core business of the two-sided platform is to provide a common (real or virtual) meeting place and to facilitate interactions between members of the two distinct customer groups. Platforms play an important role throughout the economy by minimizing transactions costs between entities that can benefit from getting together. In these businesses, pricing and other strategies are strongly affected by the indirect network effects between the two sides of the platform. As a matter of theory, for example, profit-maximizing prices may entail below-cost pricing to one set of customers over the long run and, as a matter of fact, many two-sided platforms charge one side prices that are below marginal cost and are in some cases negative. These and other aspects of two-sided platforms affect almost all aspects of antitrust analysis - from market definition, to the analysis of cartels, single-firm conduct, and efficiencies. This paper provides a brief introduction to the economics of two-sided platforms and the implications for antitrust analysis.
Download or read book Natural Monopolies in Digital Platform Markets written by Francesco Ducci and published by Cambridge University Press. This book was released on 2020-07-23 with total page 203 pages. Available in PDF, EPUB and Kindle. Book excerpt: Through three case studies, this book investigates whether digital industries are naturally monopolistic and evaluates policy approaches to market power.
Download or read book Handbook of Industrial Organization written by Richard Schmalensee and published by North Holland. This book was released on 1989-09-11 with total page 640 pages. Available in PDF, EPUB and Kindle. Book excerpt: Handbook of industrial organization/Schmalensee.-V.2.
Download or read book Defining Markets that Involve Multi Sided Platform Businesses written by David S. Evans and published by . This book was released on 2012 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: A multi-sided platform (MSP) serves as an intermediary for two or more groups of customers who are linked by indirect network effects. Recent research has found that MSPs are significant in many industries and that some standard economic results - such as the Lerner Index - do not apply to them, in material ways, without some significant modification to take linkages between the multiple sides into account. This article extends several key tools used for the analysis of mergers to situations in which one or more of the suppliers are MSPs. It shows that the application of traditional tools to mergers involving MSPs results in biases the direction of which depends on the particular tool being used and other conditions. It also extends these tools to the analysis of the merger of MSPs. The techniques are illustrated with an application to an acquisition by Google in the online advertising industry.
Download or read book Natural Monopolies in Digital Platform Markets written by Francesco Ducci and published by Cambridge University Press. This book was released on 2020-07-23 with total page 203 pages. Available in PDF, EPUB and Kindle. Book excerpt: Competition policy debates on digital platform markets are often premised on the idea that market fragmentation and the standard forces of competition and entry may provide a potential solution to excessive concentration and market power. In this work, Francesco Ducci provides readers with a different perspective based on the theoretical lens of natural monopoly. Ducci explores this framework through the development of three case studies on horizontal search, e-commerce marketplaces, and ride-hailing platforms, investigating the strength and limit of potential (and often heterogeneous) sources of natural monopoly at play in each industry. Building on these case studies, the book then derives from the application of the natural monopoly framework general policy implications for digital industries by identifying the respective institutional flaws and shortcomings of ex ante and ex post approaches to market power as one of the central challenges in digital platform markets.
Download or read book Handbook of Media Economics written by Simon P. Anderson and published by Elsevier. This book was released on 2015-11-17 with total page 820 pages. Available in PDF, EPUB and Kindle. Book excerpt: Handbook of Media Economics provides valuable information on a unique field that has its own theories, evidence, and policies. Understanding the media is important for society, and while new technologies are altering the media, they are also affecting our understanding of their economics. Chapters span the large scope of media economics, simultaneously offering in-depth analysis of particular topics, including the economics of why media are important, how media work (including financing sources, institutional settings, and regulation), what determines media content (including media bias), and the effects of new technologies. The volumes provide a powerful introduction for those interested in starting research in media economics. Helps academic and non-academic economists understand recent rapid changes in theoretical and empirical advances, in structural empirical methods, and in the media industry's connection with the democratic process Presents the only detailed summary of media economics that emphasizes political economy, merger policy, and competition policy Pays special attention to the economic influences of the Internet, including developments in social media, user-generated content, and advertising, as well as the Internet's effects on newspapers, radio, and television
Download or read book Market definition and market power in the platform economy written by Jens-Uwe Franck and published by Centre on Regulation in Europe asbl (CERRE). This book was released on 2019-05-08 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt: With the rise of digital platforms and the natural tendency of markets involving platforms to become concentrated, competition authorities and courts are more frequently in a position to investigate and decide merger and abuse cases that involve platforms. This report provides guidance on how to define markets and on how to assess market power when dealing with two-sided platforms. DEFINITION Competition authorities and courts are well advised to uniformly use a multi-markets approach when defining markets in the context of two-sided platforms. The multi-markets approach is the more flexible instrument compared to the competing single-market approach that defines a single market for both sides of a platform, as the former naturally accounts for different substitution possibilities by the user groups on the two sides of the platform. While one might think of conditions under which a single-market approach could be feasible, the necessary conditions are so severe that it would only be applicable under rare circumstances. To fully appreciate business activities in platform markets from a competition law point of view, and to do justice to competition law’s purpose, which is to protect consumer welfare, the legal concept of a “market” should not be interpreted as requiring a price to be paid by one party to the other. It is not sufficient to consider the activities on the “unpaid side” of the platform only indirectly by way of including them in the competition law analysis of the “paid side” of the platform. Such an approach would exclude certain activities and ensuing positive or negative effects on consumer welfare altogether from the radar of competition law. Instead, competition practice should recognize straightforwardly that there can be “markets” for products offered free of charge, i.e. without monetary consideration by those who receive the product. ASSESSMENT The application of competition law often requires an assessment of market power. Using market shares as indicators of market power, in addition to all the difficulties in standard markets, raises further issues for two-sided platforms. When calculating revenue shares, the only reasonable option is to use the sum of revenues on all sides of the platform. Then, such shares should not be interpreted as market shares as they are aggregated over two interdependent markets. Large revenue shares appear to be a meaningful indicator of market power if all undertakings under consideration serve the same sides. However, they are often not meaningful if undertakings active in the relevant markets follow different business models. Given potentially strong cross-group external effects, market shares are less apt in the context of two-sided platforms to indicate market power (or the lack of it). Barriers to entry are at the core of persistent market power and, thus, the entrenchment of incumbent platforms. They deserve careful examination by competition authorities. Barriers to entry may arise due to users’ coordination failure in the presence of network effect. On two-sided platforms, users on both sides of the market have to coordinate their expectations. Barriers to entry are more likely to be present if an industry does not attract new users and if it does not undergo major technological change. Switching costs and network effects may go hand in hand: consumer switching costs sometimes depend on the number of platform users and, in this case, barriers to entry from consumer switching costs increase with platform size. Since market power is related to barriers to entry, the absence of entry attempts may be seen as an indication of market power. However, entry threats may arise from firms offering quite different services, as long as they provide a new home for users’ attention and needs.
Download or read book The Antitrust Economics of Two Sided Markets written by David S. Evans and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Two-sided" markets have two different groups of customers that businesses have to get on board to succeed - there is a "chicken-and-egg" problem that needs to be solved. These industries range from dating clubs (men and women), to video game consoles (game developers and users), to credit cards (cardholders and merchants), and to operating system software (application developers and users). They include some of the most important industries in the economy.Two-sided firms behave in ways that seem surprising from the vantage point of traditional industries, but in ways that seem like plain common sense once one understands the business problems they must solve. Prices do not and prices cannot follow marginal costs in each side of the market. Price levels, price structures, and investment strategies must optimize output by harvesting the indirect network effects available on both sides. By doing so, businesses in two-sided industries get both sides on board and solve the chicken-and-egg problem. There is no basis for asking regulators or antitrust enforcers to steer clear of these industries or to spend extra effort on them. The antitrust analysis of these industries, however should heed the economic principles that govern pricing and investment decisions in these industries.
Download or read book Antitrust Analysis of Two Sided Platforms After AmEx written by Oscar Borgogno and published by . This book was released on 2019 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: The US Supreme Court ruling in American Express marks a breakthrough for antitrust enforcement in two-sided markets. Not surprisingly, the ruling has sparked lively discussions in the antitrust law and economics community.The majority of the Court argues that if both groups of players are needed to participate simultaneously for a transaction to occur, then both sides of the platform must be included when defining the relevant market. Furthermore, indirect network effects must be duly considered when carrying out antitrust analysis of transaction platforms. Hence, no inference of anti-competitive effects can be derived from price increases on one side of the platform, this being only a natural consequence of differences in the two groups' demand elasticity. Moreover, the Court stresses the relevance of the business model when carrying out the antitrust evaluation of a commercial practice.By drawing a comparison with the EU scenario, the paper analyses how the two-sidedness of platforms may affect the definition of the relevant market, and the assessment of competitive effects and undertakings' business models.
