Platform competition and market definition in the US Amex case: lessons for economics and law. Issue 2 (2nd September 2019)

• Record Type: Journal Article
• Authors: Kathuria, Vikas
• Is Part Of: European competition journal. Volume 15:Issue 2/3(2019)
• Page Start: 254
• Page End: 280
• Publication Date: 2019-09-02
• Subjects: Multi-sided platforms -- two-sided markets -- "transaction" platform -- US Supreme Court -- American Express -- relevant market; K10 -- K21 -- K40 -- L40; Antitrust law -- European Union countries -- Periodicals; Competition, Unfair -- European Union countries -- Periodicals; Restraint of trade -- European Union countries -- Periodicals; 343.40721
• DOI: 10.1080/17441056.2019.1644578
• Languages: English
• ISSNs: 1744-1056

Abstract

ABSTRACT: The rise of multi-sided platforms in the marketplace has spawned a vast amount of research to understand their implications for competition and welfare. This paper presents the scrutiny of one such academic work that classifies multi-sided platforms into "transaction" and "non-transaction" platforms for the purpose of relevant market definition. It has been posited that in the case of "transaction" platforms, there is one all-encompassing relevant market comprising of all sides of a platform. And such a "transaction" platform can compete only with another "transaction" platform. The U.S. Supreme Court in its Amex decision relied upon this classification and elevated the same into law. This paper identifies flaws in this concept by demonstrating that the relevant academic work defines "transaction" too narrowly. The paper takes the swift adoption of the "transaction" platform approach by the Supreme Court as an opportunity to also provide lessons for economics and law.