The Separation of Platforms and Commerce
Posted: 6 Jun 2018
Date Written: May 15, 2018
A handful of technology platforms mediate a growing share of commerce and communications. Structuring access to markets, these firms act as gatekeepers for billions of dollars in economic activity. While recent debate about tech platform power has focused on scale, a key feature these firms share is their structure. By being integrated across various lines of business, dominant platforms compete with the companies that now depend on them. This creates a core conflict of interest that platforms can exploit to entrench their dominance, thwart competition, and stifle innovation.
This Article argues that tackling the gatekeeper power of dominant tech platforms requires recovering a principle of structural separations. A mainstay of previous eras, separations regimes place structural limits on business activity in order to ensure that firms don’t exploit their control over critical networks. In recent decades, policy proposals to tackle gatekeeper power have focused on tools like common carriage, interoperability, and mandated interconnection. But, as this Article argues, the problems posed by digital platforms are different. Their control over critical networks and vertical integration gives them the ability not only to block access, discriminate, and leverage in the traditional sense, but also to enjoy systemic information advantages that let them extort value from other businesses. Access to the network on nondiscriminatory terms — the goal of interconnection, interoperability, and common carriage solutions — is only one facet of the problem. This Article proposes the adoption of a structural separation that prohibits dominant platforms from entering into lines of business that place them in direct competition with companies reliant on their infrastructure. Separating platforms and commerce in this way would address anti-competitive concerns, keep markets open, and promote innovation.
Keywords: Competition Policy, Antitrust, Tech
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