A Platform Paradox: Two Sides, Three Markets

Abstract

This article discusses two-sided platforms. Two-sided platforms have multiplied since the advent of the internet and the smartphone. Yet, courts have been struggling to understand how they work. This article discusses the Ohio v. American Express case. Credit card payment are a form of two-sided platforms with consumers on one side and merchant on the other. The Supreme Court made a number of mistakes in their analysis. But, in Pepper v. Apple, the Court has a new opportunity to address some of these issues. Specifically, this article argues that the Court can make a point that two-sided markets involve two types of purchasers and three antitrust markets. For antitrust purposes, both sides should be considered direct purchasers and the antitrust authorities should look competition for both sides and for transactions.

Keywords: competiton, platforms

JEL Classification: K00, K21, L4, L8