The paper – which can be found here – begins by observing that, if the relevant market is defined as including all sides of the platform, this creates a broader space of allowable trade-offs between pro- and anti-competitive effects than if the definition encompasses fewer sides. Thus, it matters crucially to case outcomes whether and how courts incorporate “multi-sidedness” during market definition. This paper suggests an approach that courts should follow when making such decisions.
- Part I explores the challenges inherent in market definition. First, it outlines how the US case law requires market definition in antitrust analysis, and describes how this case law structures market definition analyses. Second, the practical difficulties of pursuing market definition exercises in practice are explored.
- Part II addresses the added challenge of deciding whether a relevant market should comprise all, some, or no sides of the platform. It describes the economic approach to multisided platforms – which I will not focus on here, because it has been done to death in previous emails, including right above. This section also provides a very interesting overview of US cases where the multi-sidedness of a market was at issue. It ultimately concludes that, given the judicial nature of antitrust enforcement in the US and the evidentiary challenges that courts face when dealing with multisided markets, courts could benefit from a test that determines when the relevant market should incorporate all sides of the platform.
- Hence, Part III proposes a two-stage test for multi-sidedness:
- First, a court would ask (1) whether a business can explicitly charge different prices to the distinct groups to which it provides goods or services; (2) whether each group’s benefit depends on the extent of participation by the other groups provisioned by the same business, and whether that participation varies based on market conditions; and (3) whether the platform is capable of, and generally does, set uniform prices in the markets in which each group participates. For multi-sidedness to be taken into account in market definition, all three questions must be answered in the affirmative.
- If the first-stage of the test is met, the court should then ask whether the challenged conduct is designed principally to ensure the continued availability of the platform’s differentiated products. If so, the relevant market should encompass the market segments in which all sides of the platform operate.
Comment: I think this is an interesting paper, particularly for its overview of US law on multi-sidedness. It could prove a good companion to the Ohio v American Express case mentioned in the post above.