Assessing Monopoly Power or Dominance in Platform Markets
11 Pages Posted: 23 Feb 2020
Date Written: January 26, 2020
The proper assessment of monopoly power or dominance in platform markets is a hot topic of debate and study, including by competition agencies around the world and the multilateral organizations in which they participate. For example, the International Competition Network is currently gathering feedback from agencies and non-governmental advisors in response to its questionnaire on the topic. This note draws on the existing economics literature to provide responses to some of the key questions being studied. Topics include: whether to define one integrated market or two separate-product markets; the use of market shares as a proxy for monopoly power; potential barriers to entry such as network effects, data, user switching costs, and consumer biases (e.g., consumer inertia or default settings); and the role of multihoming.
Keywords: platforms, multi-sided markets, market definition, market shares, market power, dominance, consumer biases, barriers to entry, lock-in, network effects
JEL Classification: K21, I4, I5
Suggested Citation: Suggested Citation