Concentrated Digital Markets, Restrictive APIs, and the Fight for Internet Interoperability

68 Pages Posted: 28 Jun 2019 Last revised: 2 Feb 2020

Date Written: June 7, 2019

Abstract

The Internet consists of disparate websites that, though built independently by separate developers, must interact with each other to provide users a seamless online experience. Application Programming Interfaces (APIs), which enable these interactions, were originally built out of necessity but expanded as business models evolved. Some of the most familiar names on the Internet — Facebook, Amazon, and Google — have long made APIs available to allow smaller players the chance to gain a foothold in a data marketplace controlled by a concentrated few. In turn, these platforms rose to prominence as the downstream success of these third parties using APIs generated upstream value for the provider via user traffic or valuable data. Unfortunately,, these platforms increasingly close off access to information and features by restricting APIs.

This Note shows APIs are critical to Internet interoperability, which in turn fosters a truly competitive online marketplace, overly restrictive APIs can amount to prohibited anticompetitive practices. However, this Note argues that traditional antitrust is ill suited to redress these harms but the Federal Trade Commission’s Section 5 authorities are sufficiently flexible to fill the void. Given the political push to check “big tech” and the rise of Section 5 activity in data privacy, now is the time for the FTC to begin using this authority to monitor anticompetitive API designs.

Keywords: section 5, ftc, federal trade commission, antitrust, interoperability, api, application programming interface, unfair competitive practices, consumer harm, big tech, tech regulation, administrative law, walled gardens, coding, software, internet

Suggested Citation

Sharma, Chinmayi, Concentrated Digital Markets, Restrictive APIs, and the Fight for Internet Interoperability (June 7, 2019). Available at SSRN: https://ssrn.com/abstract=3400980 or http://dx.doi.org/10.2139/ssrn.3400980

Chinmayi Sharma (Contact Author)

Independent ( email )

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United States

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