Market Definition in the Platform Economy

CRC TR 224 Discussion Paper Series 2021, final version Cambridge Yearbook of European Legal Studies (CYELS), forthcoming

36 Pages Posted: 12 Feb 2021 Last revised: 3 Nov 2021

See all articles by Jens-Uwe Franck

Jens-Uwe Franck

University of Mannheim - Department of Law

Martin Peitz

University of Mannheim - Department of Economics

Date Written: March 1, 2021

Abstract

The article addresses the role market definition can play for EU competition practice in the platform economy. The focus is on intermediaries that bring together two (or more) groups of users whose decisions are interdependent and which therefore are commonly referred to as “two-sided platforms”. We address challenges to market definition that accompany these cross-group network effects, assess current practice in a number of cases with the European Commission and Member States’ competition authorities, and provide guidance on how prac-tice is to be adapted to properly account for the economic forces shaping markets with two-sided platforms. Owing to the complementarities of services provided to the user groups the platforms cater to, the question arises whether and when a single market can be defined that encompasses both sides. We advocate a multi-markets approach that takes account of cross-market linkages, acknowledges the existence of zero-price markets, and properly accounts for the homing behaviour of market participants.

Keywords: antitrust law, EU competition practice, market definition, market power, Market Definition Notice, two-sided platforms, digital markets, network effects, matching platforms, zero-price markets, homing decisions, SSNIP test

JEL Classification: K21

Suggested Citation

Franck, Jens-Uwe and Peitz, Martin, Market Definition in the Platform Economy (March 1, 2021). CRC TR 224 Discussion Paper Series 2021, final version Cambridge Yearbook of European Legal Studies (CYELS), forthcoming, Available at SSRN: https://ssrn.com/abstract=3773774 or http://dx.doi.org/10.2139/ssrn.3773774

Jens-Uwe Franck

University of Mannheim - Department of Law ( email )

Schloss Westflügel
Mannheim, 68131
Germany

Martin Peitz (Contact Author)

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany
+49 621 181-1835 (Phone)

HOME PAGE: http://peitz.vwl.uni-mannheim.de/

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