Platforms, American Express, and the Problem of Complexity in Antitrust
17 Pages Posted: 1 Mar 2019
Date Written: February 19, 2019
Something old and important is lost sight of in a case like Ohio v. American Express, the Supreme Court's recent adoption of "platform" or "two-sided market" theory in American antitrust, and in theoretical efforts like the one on which it is based. A rarely discussed idea built in to American antitrust is that, as far as the law is concerned, markets are all pretty much the same. I explain why that seemingly prosaic fundamentalism in fact serves key instrumental goals, and why neglect of them is largely responsible for the failure of modern antitrust. I show the serious consequences of that mistake by asking whether anything was preserved by the "anti-steering" rules protected in the Amex case that justify making them so hard to challenge. I further ask what the broader consequences may be of letting the cat of out-of-network effects out of the bag of static, partial equilibria.
Keywords: American Express, Ohio v American Express, platforms, two-sided markets, networks, vertical restraints
JEL Classification: D02, D43, G21, K21, L10, L11, L13, L2, L20, L22, L4, L40, L42, L49, L81, L89
Suggested Citation: Suggested Citation