Two-Sided vs. Complementary Products

By Lapo Filistrucchi – 

In his dissenting opinion in Ohio et al. vs American Express, Justice Breyer seems to call for a clarification, from Filistrucchi et al. (2014) on the distinction between products sold by two-sided platforms and complementary products. The question however has been lingering also in economic circles. In fact, it has often been the case in the past years that colleagues working in different fields have (often wrongly, but not always so) commented to me that two-sided markets are like markets for complement products. Without taking any stance on whether the alleged behavior by American Express should or should not have been deemed illegal, I discuss why and to what extent two-sided platforms are different from platforms selling complement products. I also explain why the distinction is relevant in assessing firms’ behavior for the purposes of competition policy.

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