Ignoring Two-Sided Business Reality Can Also Hurt Plaintiffs

By David S. Evans & Richard Schmalensee

Platform businesses enable distinct types of customers to interact more readily and realize gains from interacting. The basic economics of such businesses is now well-established, and U.S. courts have long sought to anchor antitrust decisions in business realities and to employ sound economics. Nonetheless, some observers have argued that taking the business realities of platform businesses fully into account in antitrust decision-making would bias decisions in favor of platform businesses with market power. This essay rebuts that argument and shows that accounting for two-sided business reality in antitrust reduces both false negatives and false positives.