 TRANSACTION VERSUS NON-TRANSACTION PLATFORMS: A FALSE DICHOTOMY IN TWO-SIDED MARKET DEFINITIONGunnar Niels Journal of Competition Law and Economics, 2019, vol. 15, issue 2-3, 327-357 Abstract: When it comes to market definition in two-sided markets, an idea that has gained traction—among academics, competition authorities and even the US Supreme Court—is the distinction between transaction and non-transaction platforms. However, this distinction has no theoretical underpinning in the context of the hypothetical monopolist test (HMT). The hypothetical monopolist sets profit-maximising prices on both sides, as a function of own-price elasticities and externalities between the sides, regardless of whether the platform is transaction or non-transaction. I address the various theoretical and practical arguments put forward in support of the distinction between transaction and non-transaction and explain why none of these justify a different approach to market definition. I also discuss why some of the policy suggestions made by proponents of the distinction—for example, that a single market should be defined for transaction platforms but separate markets for non-transaction platforms—reflect some confusion about how the HMT works. Date: 2019 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:jcomle:v:15:y:2019:i:2-3:p:327-357. Access Statistics for this article Journal of Competition Law and Economics is currently edited by Nicholas Economides, Amelia Fletcher, Michal Gal, Damien Geradin, Ioannis Lianos and Tommaso Valletti More articles in Journal of Competition Law and Economics from Oxford University Press |
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