An Antitrust Practitioner's Guide to Platform Markets: A Review of the Relevant Economic Literature

Abstract

With recent advances in technology, more and more of the world is being connected to the internet, at progressively faster speeds. Piggy-backing on this increasing penetration are a swarm of new products and services, who seek to create value by playing intermediary – connecting different groups of people and facilitating interactions that would otherwise have been impossible, or at least very costly.

This paper provides an overview of the economic literature on multi-sided platforms, with a focus on literature examining antitrust issues in the multi-sided context, and summarises key insights that can help antitrust authorities and other practitioners better understand and analyse competition issues in platform markets.

The paper contains two broad parts. The first, consisting of Sections 2 and 3, articulates the economics of multi-sided platforms: Section 2 defines and categorises multi-sided platforms; and Section 3 briefly lays out key economic results, both static and dynamic. The remainder of the paper examines the implications of these results on all various kinds of antitrust analyses: Section 4 focusses on market definition; Section 5 on assessing market power; Section 6 on merger analysis; Section 7 on the analysis of coordinated behaviour; and Section 8 on abuse of dominance analysis. Section 9 concludes.

Keywords: Antitrust, Competition, Platform, Two-Sided Markets, Multi-Sided Markets, Market, Competition Law, Antitrust Law, Literature Review

JEL Classification: K21, K00, L17, L00, L4, L14, D21, D22, D49