The recent AMEX decision has introduced the economics of “multisided platforms,” “transaction platforms,” “indirect network effects,” and “two-sided analysis” into antitrust analysis. As is often the case, sometimes such descriptive words precede any precise, scientific definition. In this brief note, we will explore some generally accepted concepts, how they relate to measures of market power, and how they support the calculation of at least one source of antitrust damages, the price overcharge. We focus on the economics of platforms with a particular emphasis on the different funding models available to two-sided platforms. We have argued that economic profit margins can serve as not only meaningful indicators of market power, but also provide a practically useful quantitative benchmark of the but-for world. That benchmark can be translated into a but-for net (two-sided) price, leading directly to a calculation of overcharge by the platform.  While the net price overcharge is uniquely determined for a given profit benchmark, the precise allocation of the overcharge between the two sides can depend on market frictions and the relative strength of indirect network effects and demand elasticities.

By Rosa M. Abrantes-Metz & Albert D. Metz[1]


The famous (some may say infamous) AMEX decision has introduced and strengthened a great deal of economic jargon into the legal lexicon; “multisided platforms,” “transaction platforms,” “indirec


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