Platforms, including vertically integrated platforms, are ubiquitous — both in the modern economy, and throughout history. While some such firms have managed to capture the popular imagination (and ire), there is good reason to expect self-preferencing by vertically integrated platforms is far more likely to benefit competition than to harm it. While there are limited cases in which self-preferencing could be harmful, existing antitrust laws are more than capable of addressing these situations. Finally, the proposed cures for a largely illusory problem are likely to inflict a great deal of harm, for little apparent gain. Antitrust enforcement involving platform self-preferencing should continue to follow the better course established by the existing legal and economic framework.
By D. Bruce Hoffman & Garrett D. Shinn1
Over the last few years, antitrust law has surged to an unusually prominent position in popular and political discourse — largely due to a chorus of claims that antitrust enforcement has been overly lax for close to half a century.2 Some of the loudest complaints target situations where a firm that offers a place for others to sell their products (a “platform”) decides that it’s going to sell its own products there as well — and sometimes gives its products an advantage.
This practice, frequently called “self-preferencing,” is often taken as a self-evident evil in need of a cure. Thus, Senator Elizabeth Warren colorfully used a base...