Digital markets are dynamic in nature. They are constantly innovating, creating the need for traditional systems to adapt to accommodate any disruption they may cause in already settled systems. This is also true when it comes to antitrust analysis, as traditional tools may not remain sufficient to analyze multisided platforms, and this may impact the antitrust policy as a whole. The definition of relevant market is one example.
A starting point for the antitrust analysis is to define the relevant market in a way to help identify the set of players that compete with each other. The definition of relevant market is traditionally based on both the product and the geographical dimensions of the market, which are analyzed in order to determine whether there is substitutability of a given product in a given area. In some cases, a time criterion may also be applied since a product which has no substitute today may well have a substitute tomorrow.
But some activities may involve the interests of different players, and this is when defining the relevant market becomes a complex task. Multisided relevant markets are those in which different groups interact with each other, the demand of one group directly affecting the demand of the other. In digital market, major service provider platforms as Uber, Google, Amazon, Facebook are only some of the many examples of multisided markets.
The features of multisided markets in digital ecosystems make multisided markets very hard to be assessed from the antitrust perspective. This is because traditional assessment methods do not account for such specifics, for the interdependence between the demand of all sides, or for the importance of network effects on such platforms. This scenario can be very problematic because such markets tend to be monopolistic, i.e., one single player tends to dominate the market due to the high level of investment in research and technology these markets usually require.
The European Union has been showing increasing concern on identifying the features of multisided markets and their effects on consumers in digital economy. For instance, in March 2019, the European antitrust authority ruled that the Android mobile operating systems are no longer allowed the Google search as a default engine. Starting in the second quarter of 2020, Android users may choose to have any search engine other than Google on the main screen of their device. In addition to enhancing users’ power to choose, this ruling improves competition between search engines (hence both sides of this market).
Due to the increasing innovations of the digital economy markets, one should also expect that antitrust analysis methods are supposed to change as well, in order to preserve the fine balance between maintaining the innovation flow and promoting competition.
