Multisided Platforms and Antitrust Enforcement

Yale Law Journal 2018, Forthcoming

32 Pages Posted: 8 Mar 2018

See all articles by Michael L. Katz

Michael L. Katz

University of California, Berkeley - Department of Economics; Haas School of Business

Jonathan Sallet

affiliation not provided to SSRN

Date Written: February 25, 2018

Abstract

Multisided platforms are ubiquitous in today’s economy. Although newspapers demonstrate that the platform business model is scarcely new, recent economic analysis has explored more deeply the manner of its operation. Drawing upon these insights, we conclude that enforcers and courts should use a multiple-markets approach in which different groups of users on different sides of a platform belong in different product markets. This approach appropriately accounts for cross-market network effects without collapsing all of a platform’s users into a single product market. Furthermore, we advocate the use of a separate-effects analysis, which rejects the view that anticompetitive conduct harming users on one side of a platform can be justified so long as that harm funds benefits for users on another side. Courts should consider the price structure, and not simply the net price, of a platform in assessing competitive effects. This approach in turn supports our final conclusion: that antitrust plaintiffs should not be required to prove as part of their prima facie case more than occurrence of competitive harm in a properly-defined market; thereafter, the burden to produce procompetitive justifications should shift to defendants.

Suggested Citation

Katz, Michael L. and Sallet, Jonathan, Multisided Platforms and Antitrust Enforcement (February 25, 2018). Yale Law Journal 2018, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3131933 or http://dx.doi.org/10.2139/ssrn.3131933

Michael L. Katz

University of California, Berkeley - Department of Economics ( email )

579 Evans Hall
Berkeley, CA 94709
United States

Haas School of Business ( email )

Berkeley, CA 94720
United States

Jonathan Sallet (Contact Author)

affiliation not provided to SSRN

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