The Antitrust Relevance of Granular Versioning
15 Pages Posted: 30 Apr 2019
Date Written: March 31, 2019
Abstract
Ordinary versioning – that is, firms’ ability to supply several versions of the same goods at different prices – does not represent a novelty from either a practical or a theoretical standpoint. Firms have been engaging in customization from the ‘80s onwards. Economists have been discussing this form of price discrimination – also named “second-degree quality discrimination” – since the beginning of the twentieth century. However, in the age of data economy and personalized manufacturing systems, firms have been increasing their ability to tailor their prices and goods to customers. Not only can they analyse the information resulting from the data that they collect to learn about customers’ needs and willingness to pay but they can also involve customers in the design of their products and services, with the ultimate result of supplying clients not a composite menu of alternative goods, but the exact goods that they want.
The paper analyzes why, from the antitrust standpoint, granular versioning is different from ordinary versioning and discusses how it should be assessed.
Keywords: big data, personalized prices, personalized production
JEL Classification: K21
Suggested Citation: Suggested Citation