Two-Sided Platform Markets and the Application of the Traditional Antitrust Analytical Framework

Competition Policy International, Vol. 3, No. 1, Spring 2007

6 Pages Posted: 22 May 2007

See all articles by Renata B Hesse

Renata B Hesse

Wilson Sonsini Goodrich & Rosati

Abstract

It only takes working through a single matter that involves a two-sided market to recognize that the antitrust analysis can be a bit more complicated than with standard one-sided markets. The principle reason for the complication is evident from the descriptive moniker given these markets: they have two sides or, put more practically, they have two sets of independent customers. Generally, two-sided markets are characterized by

(1) the presence of two distinct classes of customers for a vendor's product or service, both of which are necessary for the existence of the product or service, and

(2) indirect positive externalities between different classes of customers, meaning that the value of the product or service to one class of customer increases with the level of usage by the other customer class, at least up to a point.

But why do these features make a difference in terms of the application of standard antitrust principles to these markets? Or, more colloquially, why is everyone talking about two-sided markets?

Keywords: multi-sided platforms, two-sided markets, two-sided platforms, antitrust, antitrust analysis, competitive effects

Suggested Citation

Hesse, Renata B, Two-Sided Platform Markets and the Application of the Traditional Antitrust Analytical Framework. Competition Policy International, Vol. 3, No. 1, Spring 2007, Available at SSRN: https://ssrn.com/abstract=987843

Renata B Hesse (Contact Author)

Wilson Sonsini Goodrich & Rosati ( email )

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