Magali Eben and Viktoria Robertson ‘The Relevant Market Concept in Competition Law and Its Application to Digital Markets: A Comparative Analysis of the EU, US, and Brazil’ (2021) Graz Law Working Paper No 01-2021

Market definition is a core analytical tool that helps in the assessment of anti-competitive agreements, unilateral conduct and mergers. However, the difficulty of delineating a relevant market with the required predictability in digital markets has led some to question whether market definition can continue to fulfil its traditional functions in these dynamic market environments. The present contribution, available here, first surveys the general approach to market delineation in the EU, the US and Brazil. Against this background, it then embarks on a discussion of market definition in digital markets in each of these jurisdictions, with a particular focus on multi-sided markets, zero-price services and the concept of digital ecosystems. Section 2 surveys the general approach to market delineation in the EU, US and Brazil. The main parameters of market definition are strikingly similar in the EU, the US and Brazil. All these competition laws heavily rely on the relevant market as an analytical tool. However, while market definition is mainly…

Herbert Hovenkamp ‘Digital Cluster Markets’ (2021)

Many antitrust violations require proof of market power. Historically, the way antitrust litigants and courts have estimated power is by determining a market share of a properly defined “relevant market” of substitutable products. However, many firms sell more than a single product and, frequently, sell non-competing products. The possibility of aggregating noncompeting products or services leads to the creation of “cluster markets” consisting of noncompeting goods. Antitrust claims are often made regarding such clusters. It then becomes important to ask when it is sensible to locate power in the cluster itself, rather than in the simple presence of any particular item. This paper, available here, argues that clustering noncompeting products into a single market for purposes of antitrust analysis can be valuable, provided that the limitations of such an approach are understood. Clustering contributes to market power only when it is found, cumulatively, that: (1) many customers need or at least prefer the convenience of receiving the defendant’s grouping of…

Özlem Bedre-Defolie and Rainer Nitsche ‘When Do Markets Tip? An Overview and Some Insights for Policy’ (2020) Journal of European Competition Law & Practice 11(10) 610

Competition authorities are increasingly concerned that their tools are not fit to deal with digital multi-sided platforms, which operate in markets that have a tendency to ‘tip’. However, the academic literature does not yet provide guidance on how to identify the likelihood of tipping in a market. Instead, the literature identifies a number of factors that might foster or mitigate tipping under certain circumstances. This paper, available here, reviews the literature and identifies the key market characteristics that facilitate tipping and those that mitigate it. It also advances four key questions to guide policy makers in the development of methods to identify the likelihood of tipping. Section 2 discusses factors that facilitate market tipping. The authors identify six key factors that foster tipping in markets with multisided platforms: positive network effects, single-homing and switching costs, free services, data-enabled learning, trust, and platforms’ complementary offerings. Markets with multisided platforms typically also exhibit classical factors that foster concentration, like economies of scale…

David Glasner and Sean P. Sullivan on ‘The Logic of Market Definition’ (forthcoming) Antitrust Law Journal

This paper,available here , is not technically about merger control, but it is as relevant here as in any other competition topic – and it fits nicely with wider discussions of market power and market entry, which, as we have seen in past weeks, are common in merger control. While the usefulness of, and methodologies concerning market definition would seem to be well established, in practice both are actively questioned. Some have even argued that market definition is unnecessary in competition law. While this argument is not new, Louis Kaplow has recently advanced this thesis with a particularly pointed argument that: (1) market definition serves no role except to produce market shares, (2) market shares are poor measures of market power, and (3) antitrust would be better served by ignoring market shares and trying to assess market power from estimates of residual-demand curves and the like instead. The goal of this paper is to trace the internal logic of market…