Self-Preferencing: Yet Another Epithet in Need of Limiting Principles

Abstract

Self-preferencing is central to contemporary competition law discussions, in particular in digital markets. This paper considers the meaning and scope of the label. It shows, first, that favoring an affiliate is, in itself, an expression of competition on the merits. Such conduct is typically linked to the very pro-competitive benefits that are expected from horizontal and vertical integration. Second, self-preferencing is not a sound category, whether from a legal or an economic perspective. It potentially applies to conduct that differs widely in its nature, purpose and effects. The scope of the category would range from traditional instances of tying, on the one hand; to cases that would demand a competition authority to interfere with the design of a product and/or a firm's business model, on the other.

Against this background, the use of self-preferencing as a category would require addressing some issues of principle. In the first place, it seems particularly necessary to ponder the substantive and institutional implications of abandoning indispensability as a filter limiting the exposure of the system to proactive intervention. In the second place, the need to preserve a robust assessment of effects comes across as particularly important.

Keywords: Self-Preferencing; Vertical Integration; Horizontal Integration; Tying; Refusal to Deal; Product Design; Business Model

JEL Classification: K21, L14, L24, L41, L42