Owen Kendler, Jun 13, 2013
The antitrust community talks perennially about multisided or two-sided markets. At first glance, this attention may appear misplaced. The courts have not reached a final decision in a litigated case involving a multisided market since 2003, when the Court of Appeals for the Second Circuit affirmed the U.S. Government’s win in U.S. v. Visa. So, why do multisided markets receive so much continued focus? And is this focus warranted?
I think there are three main reasons why multisided markets continue to be a hot topic. First, economic thought on multisided markets has progressed since U.S. v. Visa, providing analysts with opportunities to debate how the courts and antitrust agencies should define relevant markets and review competitive effects. Second, the relative newness of online platforms has generated speculation in the legal community about whether and how they should be viewed as multisided markets. Third, the absence of guidance from the courts on whether traditional one-sided market tests need to be modified or abandoned when reviewing mergers or competitive practices involving markets with two or more sides has left a void that has been filled by commentary.
Given these driving factors, it is no wonder that there is so much focus on multisided markets. And, particularly in light of continued litigation involving multisided markets without court guidance, this interest seems appropriately placed.
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