Price Discrimination against Multi-Clouders

Jihwan Do and Jeanine Miklos-Thal

No 20101, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The cloud services industry, which is currently dominated by a few large providers, has come under scrutiny from antitrust authorities worldwide. One concern is that ``egress fees"—charges for transferring data out of a provider’s cloud—could harm competition and welfare by discouraging multi-clouding, whereby a user combines services from several providers. Motivated by this policy concern, we analyze the effects of banning price discrimination against multi-stop shoppers in a market where multi-product firms sell complementary goods to buyers with elastic demands, and multi-stop shoppers impose higher service costs than one-stop shoppers. We find that if buyers are locked into a specific product combination, then a ban on price discrimination against multi-stop shoppers raises social welfare for a wide range of demand functions. If product choices are endogenous and buyers' product preferences are weak, however, then a ban on price discrimination tends to harm social welfare.

JEL-codes: D43 L13 L40 (search for similar items in EconPapers)
Date: 2025-04
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