Platforms are not a new business model, but rather an old one that has been rejuvenated by the sheer scale and scope of the participants in digital economy. The complexity this creates has renewed the need for, and the value in having a simple meeting place where those interested in trading particular products and services can find one another, and perhaps be entertained while doing so. It appears that users are not looking for a particular seller, or someone that carefully selects and assures the quality of suppliers, instead they crowdsource recommendations and ask only that they be able to search for, or introduced by algorithm to, the best possible match. Many digital marketplaces remain free to consumers, the market-makers having decided against charging for entrance or use of their platform services, and instead to use the available technology to monetise the information conveyed by users. While this was not possible in the past, it is now, largely as a result of the ability to digitalise what we know (the customer relationship), and the low value that users attach to the sharing of this information. This does not mean competition is necessarily working effectively, however nor does it mean that there is undetected anticompetitive conduct by firms. More likely, the answer lies in consumers having greater awareness of the surplus that is generated, and more effective tools to extract it from the market when prices hit zero. To investigate whether the antitrust toolkit remains fit-for-purpose the OECD Competition Committee held a Hearing in June 2017. This asked whether the tools traditionally used to define markets, to assess market power and efficiencies, and to assess the effects of exclusionary conduct and vertical restraints, remain sufficient to address those questions in the context of these multi-sided platform markets. At the hearing a range of expert economists from agencies, academia, and private practice were invited to make practical methodological proposals on how these tools might need to be re-designed or re-interpreted in order to equip competition agencies with the analytical tools they require when analysing multi-sided platform markets. This report features each of the contributions made by those experts (and their co-authors) along with an opening synthesis chapter by the OECD.
Rethinking Antitrust Tools for Multi-Sided Platforms