Relevant Market Definition and Multi-Sided Platforms Post Ohio v. American Express: Evidence From Recent NCAA Antitrust Litigation

Abstract

The treatment of multi-sided platforms in antitrust litigation has received increasing attention as of late, particularly evidenced in the Ohio v. American Express litigation. The potential implications of the Supreme Court’s recent ruling have garnered interest from legal scholars, litigators, and economists alike, particularly those actively involved in antitrust issues. Some have cautioned that the ruling represents the gutting of antitrust law , while others have maintained that its scope is limited and unlikely to effect a broad change in antitrust jurisprudence. To illuminate the potential nature of parties’ multi-sided platform arguments in future litigation, this article details how the multi-sided platform argument was addressed in In Re NCAA Grant-in-Aid Litigation (NCAA GIA), for which trial began in September 2018 and its implications for future litigation. In this litigation, Plaintiffs have challenged the National Collegiate Athletic Association (NCAA) cartel’s restriction on athlete compensation at the cost-of-attendance and its prohibition on payment in exchange for athletic participation (“pay-for-play”). The NCAA GIA case involves two key issues that lie at the forefront of current antitrust interest in anticompetitive conduct: the use of monopsony power to restrain wages and the complication of relevant market definition by indirect network externalities that often characterize multi-sided platforms.

This article further argues that the Supreme Court’s decision Ohio v. American Express has effectively abrogated in part its previous opinion in NCAA v. Board of Regents with regard to claimed cross-platform effects. American Express has done so by neutering a key procompetitive justification the NCAA continues to offer for its restraint on athlete compensation, namely its effect on consumer demand for “amateurism”. This article investigates whether the presence of claimed indirect network effects sufficiently support the position that colleges and universities that engage in intercollegiate athletics represent multi-sided platforms. In doing so, the purpose of this article is not to analyze the economic merits of the Supreme Court’s decision with respect to relevant market definitions involving multi-sided platforms but rather to investigate its interpretation in the NCAA antitrust litigation and its implication for the seminal Board of Regents case.

Keywords: Multi-Sided, Antitrust, NCAA, Rule of Reason, Procompetitive Justification