Online Platforms and Vertical Integration: The Return of Margin Squeeze?

Journal of Antitrust Enforcement 2018, Vol. 6(3), 355-381

Faculty of Law, Stockholm University Research Paper No. 42

28 Pages Posted: 25 Nov 2017 Last revised: 19 Jul 2019

See all articles by Friso Bostoen

Friso Bostoen

KU Leuven - Institute for Consumer, Competition & Market

Date Written: 2017

Abstract

When competition authorities struggle to assess abusive practices by online multi-sided platforms, the issue does not appear to be defining markets or determining market power; rather, the difficulty is finding a fitting theory of abuse. In the search for such theories, one candidate has been overlooked: margin squeeze. This infringement has for the most part been confined to the telecom sector, but its potential reaches beyond. Indeed, the conduct of online platforms could force margin squeeze out of retirement. This article starts from the foundations of margin squeeze theory, laying out the core principles and addressing possible misconceptions. The article then investigates whether margin squeeze theory could be applied to online platforms with the help of three case studies (involving app stores, search engines and online marketplaces). Before concluding, it contemplates the idea of neutrality underlying margin squeeze and related policies such as network neutrality.

Keywords: margin squeeze, vertical integration, telecom, online platforms, Apple, Google, Amazon

JEL Classification: K00, K20, K21, K24, L40, L41, L43

Suggested Citation

Bostoen, Friso, Online Platforms and Vertical Integration: The Return of Margin Squeeze? (2017). Journal of Antitrust Enforcement 2018, Vol. 6(3), 355-381; Faculty of Law, Stockholm University Research Paper No. 42. Available at SSRN: https://ssrn.com/abstract=3075237 or http://dx.doi.org/10.2139/ssrn.3075237

Friso Bostoen (Contact Author)

KU Leuven - Institute for Consumer, Competition & Market ( email )

Tiensestraat 41
Leuven, Vlaams-Brabant 3000
Belgium

HOME PAGE: http://https://www.law.kuleuven.be/ccm

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