Essential Principles for the Design of Antitrust Analysis for Multisided Platforms

30 Pages Posted: 18 Oct 2018

See all articles by David S. Evans

David S. Evans

Global Economics Group; University College London

Date Written: October 6, 2018

Abstract

This paper presents some basic principles for conducting the antitrust analysis of multi-sided platforms in light of the economic learning that courts could adapt to the particulars of their jurisdictions and case laws. It has a particular focus on measuring consumer surplus for platform businesses and the implications of that for the design of sound antitrust rules. It shows how multi-sided platforms increase welfare by reducing transactions costs and resolving externalities among economic agents. Its presents normative principles for policy interventions the first of which involves considering the joint surplus for both group of customers shows how these principles apply to recent debates over privacy. The paper then develops a framework for considering antitrust rules in light of these principles given the objectives of antitrust law, error costs, and developing administrable rules. It lastly considers the competing approaches to analyzing multi-sided platforms that were presented to the Supreme Court in the American Express litigation and the court’s decision.

Keywords: multisided platforms, two-sided platforms, antitrust policy, American Express Supreme Court, design of competition policy, consumer welfare in antitrust

JEL Classification: K21, K40, K15, L40, L41, L42, L51

Suggested Citation

Evans, David S., Essential Principles for the Design of Antitrust Analysis for Multisided Platforms (October 6, 2018). Available at SSRN: https://ssrn.com/abstract=3261812 or http://dx.doi.org/10.2139/ssrn.3261812

David S. Evans (Contact Author)

Global Economics Group ( email )

111 Devonshire St.
Suite 900
Boston, MA 02108
United States

University College London ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

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