The Market Dominance of US Digital Platforms: Antitrust Implications for the European Union

Abstract

The persistent dominance of US digital platforms relates to strategies that can be justified on efficiency grounds. However, these strategies might also offset competition and have ambiguous welfare effects. Overall, though, the economic literature does not provide a clear theoretical ground for a systematic regulation of their dominance, rather it advocates a targeting of specific unlawful anticompetitive practices. The examination of the rationale of major antitrust cases vis-à-vis global digital platforms suggests that EU authorities should adjust their doctrine and practice of competition policy to make it closer to the US approach. This realigning would serve the purpose of building a competitive EU digital ecosystem and a more balanced and efficient worldwide competition between all digital providers. In addition, EU competition authorities should also support price caps as welfare enhancing forms of cooperation, which could allow the emergence of platform pricing strategies within competitive markets and not only within monopolies.

Keywords: Antitrust, dominance, network effects, two-sided platforms, competition policy.

JEL Classification: L10, L40, O30.