This paper, which can be found here, aims to shed light on the different approaches adopted by different European antitrust authorities to assess the allegedly anticompetitive MFN practices of a platform operating in a two-sided market. This is done by means of a law-and-economics analysis of the different approaches to by competition authorities in France, Germany, Italy and Sweden, with an eye to discussing the specific difficulties raised by two-side market economics.

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The paper is structured as follows:

Section II presents the key features of two-sided markets economics.

Two-sided markets present some peculiar traits, which distinguish them from more “traditional” markets. Firms operating in these markets serve more than one group of consumers simultaneously and offer them the opportunity, as well as an interface, for fruitful exchanges. These value-enhancing interactions generate important direct and indirect network externalities among the groups, which platforms would typically aim to internalise. As a result, platform profitability depends not so much on the price level as on the price structure. This structure reflects the heterogeneity, as well as the cross-group network effects, of all different types of consumers. Since it would be impossible to bring together dissimilar demands by setting a single price level, platforms often subsidise the side of the platform that creates a greater externality on the other group. Users on one side of the market may pay a price (considerably) below marginal cost, whereas users on the other side will be charged a price which is (considerably) higher than the marginal cost the platform incurs to serve them.

These features allow the paper to identify three key challenges that competition authorities face when taking decisions on platforms operating in this kind of markets: (1) integrating two-sided markets’ features into competition analysis, (2) defining the relevant market, and (3) assessing the anticompetitive effects of the allegedly abusive practices.

In Section III, the authors pursue a cross-country, comparative analysis of four competition proceedings against’s rate parity clauses. is a two-sided Online Travel Agent (OTA) offering a platform for consumers to search for, compare and book hotel rooms free of charge, and for hotels to have their offers promoted to consumers. The service provided by is free of charge until a reservation is made on the platform. When a reservation is made, the hotel pays a commission (going from 10% to 30% of the room price) to the platform. Since is not remunerated unless a booking is made on the platform, the business is only viable if the risk of freeriding (i.e. finding the hotel on the platform and then booking through other channels) can be appropriately integrated into its business model. To this end, rate parity clauses (also known as “best price clauses” or “across platform parity agreement”) commit the hotels present on to offer the same or better terms and conditions on than on all the hotels’ other direct and indirect sales and distribution channels.

Following complaints, many European authorities launched investigations into these rate parity clauses agreements. then proposed a set of commitments that would narrow the scope of application of its parity clauses. In particular, it accepted to move from wide clauses – i.e. hotels had to refrain from offering better terms and condition on any distribution channel other than – to narrow parity clauses – i.e. hotels can offer lower room prices and better room availability on other online travel agents and offline sales channels, but must refrain from publishing lower room prices or better conditions on their own website. As a result, the legal proceedings against the platform were officially closed in France, Italy, and Sweden. In Germany, however, the competition authority found that these commitments were insufficient to solve the related competition concerns and banned both wide and narrow price parity clauses. Furthermore, in other countries, such as France and Italy, the outcome of the NCAs’ decisions was eventually altered by an ex post intervention by the legislator, also translating in a complete ban.

This section reviews the various steps in each investigation / legislative interventions, and identifies the various differences in approach to multi-sided markets.

  • As regards markets – In France the Autorite identified a market for the supply of online travel agency reservation services for hotel stays. In Italy, the relevant market was that for online hotel booking services. In Sweden, the relevant market was defined as the market for the provision of online travel agency services that allow booking on the platform. In Germany, the relevant market was the market for intermediary services of hotel portals offering three kinds of different services, “search, compare and book”, which are “convenient for hotel customers”.
  • As regards anticompetitive effects – The French authority found that had market power, which meant that the rate parity clauses could reduce competition between online travel agencies and foreclose smaller platforms or new entrants. In Italy, the concerns focused on the fact that the rate parity clauses were vertical restrictions which would significantly reduce the incentive for various booking channels to compete on prices and other conditions. Moreover, these clauses could be strategically used to deter new entrants. In Sweden. The focus was explicitly on horizontal effects, namely the fact that the same room cannot be offered at better conditions on other online travel agencies because it affects “the competition between companies in the same relevant market”. In Germany, even narrow price parity clauses were said to restrict competition on hotels’ own websites. was thus accused of “unfair impediment of the small and medium-sized hotel partners depending on Booking” since their competitive freedom of action over other “online distribution channels” is still significantly reduced.

In short, this section seeks to demonstrate that the absence of a consensual legal-economic framework for the analysis of two sided markets may result in contradictory decisions regarding the very same behaviour by the same platform. Furthermore, no authority engaged with the implications of operating on a two-sided market: ‘In this “one-sided logic in two-sided markets” the four NCAs do not take into account the relevance of indirect network effects in the competition analysis”. The authorities’ one-sided approach is confirmed in the definition of the relevant market, which only refers to one side of the platform. Lastly, even though the relevant market definitions are similar, the approach to anticompetitive practices, as well as the identification of their effects, significantly differ in the four proceedings. The agencies adopt different theories of harm, and seem to struggle with the identification of market power.

Section IV reviews the effects of the decisions in the four countries under analysis, two years after their entry into effect.

A working group composed of ten national competition authorities and the European Commission’s DG Competition carried out a monitoring exercise to assess the effects of the antitrust enforcement measures in the online hotel-booking sector. An analysis of the effects two years after the acceptance of the commitments does not seem to support clear conclusions regarding their effect. A number of empirical studies are currently being carried out to measure the effects of the competition authority’s decisions on price levels, price differentiation, and on competition on different distribution channels, but results are yet not available at the time of writing.

Building on the results of the previous sections, Section V proposes some alternative approaches for future antitrust analyses in two sided markets.

In particular, the authors argue that: (i) key features of two-sided markets and platforms should not be overlooked in antitrust analysis, unlike in the flattening of relevant markets by the competition authorities in the cases reviewed above; (ii) along with network effects, the relevant market definition and competition assessment should also take supply-side substitution into account (e.g. the possibility of other internet platforms entering the market for online booking services); (iii)  systematic resort to commitment procedures hinders the development of a sound analytical framework to assess anticompetitive practices in two-sided markets.


Anyone (like me) who wants to understand the discussion surrounding most-favoured nation clauses will hardly find a more comprehensive discussion of recent European decisions. The paper describes the cases in detail, and illustrates the absence of consensus on how to address multi-sided markets. As is clear from the summary above, the section that addresses this topic takes over the lion’s share of the paper, and this is a solid analysis that could amount to a paper on its own – which could have been enriched with a discussion of efficiency defences as regards MFNs.

Yet, the paper also implies that it will provide insights into how to analyse cases in multi-sided markets. On this front, I was left wanting more. In particular, I do not really see how section V and the recommendations contained therein link to the analysis of the cases. This is particularly unclear to me because, despite the differences in approaches and remedies to similar practices, the paper itself argues that it is unclear whether different analyses would lead to different legal outcomes, or that different legal outcomes led to different practical outcomes.

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