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Platform Market Power

42 Pages Posted: 27 Nov 2017 Last revised: 4 Dec 2017

Kenneth A. Bamberger

University of California, Berkeley - School of Law

Orly Lobel

University of San Diego School of Law

Date Written: November 20, 2017

Abstract

The rise of the platform economy has been the subject of celebration and critique. Platform companies like Uber, Airbnb, and Postmates have been rightfully celebrated as positively disruptive, introducing much–needed competition in industries that have been otherwise over–mature and stagnant. However, some of the leading new platforms have had such meteoric success that their growing market dominance and technical capacity raise questions about new forms of anti-competitive practices, and negative impacts on consumer and employee welfare.

In this Essay, we develop a framework for considering the market power of platform companies that use digital technology to connect a multi-sided network of individual users. Specifically, we use the example of Uber as a lens to identify eight questions that are important for assessing platform power. These questions address the way a range of issues play out in the platform context, including more traditional competition concerns around innovation, regulatory arbitrage, barriers to entry, and price setting through platforms’ use of the network form to coordinate transactions, the use of digital pricing, and the use of pricing bots. These questions also focus on new concerns about power derived from data collection and use; the use of data to expand into other markets; and the implications of market power for consumer choice about personal privacy.

Together, these questions provide policymakers a framework to consider whether and how questions of market power (and competition more generally) may pose complexity or require analytic adjustments—and how the development of platforms implicates both new opportunities for, and challenges to, consumer and employee welfare in the digital context.

Keywords: platforms, market power, antitrust, consumer protection, privacy, competition, big data, multisided networks, Uber, price fixing, predatory pricing, bots, digital pricing, barriers to entry, price discrimination, data collection, adjacent markets

JEL Classification: K20, K21, K22, K23, K32, L40, L41, L42, L43, L44, L51, L86, L91, L98, R48

Suggested Citation

Bamberger, Kenneth A. and Lobel, Orly, Platform Market Power (November 20, 2017). Berkeley Technology Law Journal, Vol. 32, No. 3, 2017; San Diego Legal Studies Paper No. 17-311; UC Berkeley Public Law Research Paper. Available at SSRN: https://ssrn.com/abstract=3074717

Kenneth Bamberger (Contact Author)

University of California, Berkeley - School of Law ( email )

Boalt Hall NA446
Berkeley, CA 94720-7200
United States
(510) 643-6218 (Phone)

HOME PAGE: http://www.law.berkeley.edu/faculty/profiles/facultyProfile.php?facID=5701

Orly Lobel

University of San Diego School of Law ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States

HOME PAGE: http://home.sandiego.edu/%7Elobel/

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