David S. Evans  ‘Basic principles for the design of antitrust analysis for multisided platforms’ (2019) Journal of Antitrust Enforcement 7 319

Competition agencies and courts have increasingly had to deal with multiplatform businesses – and have started to incorporate economic insights on their operation into their decisions. Nonetheless, many questions concerning the design of antitrust analysis involving platform businesses remain unsettled. This article, available here, develops three basic principles for conducting the antitrust analysis of multisided platforms in light of economic learning, as follows: Section II explains how multisided platforms increase welfare by reducing transactions costs and resolving externalities among economic agents. Platforms lower transaction costs by bringing potential traders to a common place for interacting, thereby solving a collective action problem. The economics literature often relies on simple indirect network effects to explain how two-sided platforms create value. Positive indirect network externalities arise because the presence of additional numbers of the right counterparties increases the likelihood of good exchanges. In practice, however, the externality issues addressed by platforms are broader and subtler. Platforms also often deal with negative network externalities…

Gunnar Niels ‘Transaction Versus Non-Transaction Platforms: A False Dichotomy In Two-Sided Market Definition’ (2019) Journal of Competition Law & Economic

It is commonly accepted that market definition is more complex in two-sided markets than in normal (single-sided) markets. A proposal to simplify this exercise is to distinguish between transaction and non-transaction platforms. Two-sided transaction platforms such as payment card systems, online marketplaces and auction houses, are characterised by the presence and observability of a transaction between the two groups of platform users, so that the platform operator can impose a per transaction charge or two-part tariff (for joining and using the platform). In contrast, non-transaction platforms, including most media platforms, have no such transaction between the two sides. It follows that, while  in non-transaction markets one must define two (interrelated) markets, while a single market encompassing both sides should be defined for transaction platforms. The author argues here that this distinction is inapposite, particularly in the context of the hypothetical monopolist test. This article addresses the various theoretical and practical arguments put forward in support of the distinction between transaction and non-transaction,…

Francesco Ducci ‘Procedural implications of market definition in platform cases’ (2019) Journal of Antitrust Enforcement 7 419

One of the most important questions raised by the economics of platforms, particularly for the adjudication of competition law disputes, is how to structure a legal framework that incorporates multi-sidedness while remaining consistent with the general principles guiding a rule of reason/effects-based analysis. Such framework becomes more complex in platform cases because the presence of multiple sides with interrelated demand coordinated by an intermediary platform raises additional questions that need to be confronted. This include: (i) How many markets should be defined, a single platform market or separate markets on each side? (ii) Should one aggregate the welfare effects on different users on the various sides of a platform, or should effects on each market side be treated in isolation? (iii) How should the burden of proof of anticompetitive and pro-competitive effects be allocated? Depending on whether the relevant market includes the platform as a whole or just one side, the boundary of the relevant market has fundamental consequences for…