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European regulation centre publishes platform economy report

The Centre on Regulation in Europe (CERRE) has published “Market definition and market power in the platform economy”, which provides guidance on how to define markets and on how to assess market power when dealing with two-sided platforms. On definition, it says: “Competition authorities and courts are well advised to uniformly use a multi-markets approach when defining markets in the context of two-sided platforms.” The multi-markets approach is a more flexible instrument than the competing single-market approach that defines a single market for both sides of a platform, as the former naturally accounts for different substitution possibilities by the user groups on the two sides of the platform. On assessment, the report says that the application of competition law often requires an assessment of market power. “Using market shares as indicators of market power, in addition to all the difficulties in standard markets, raises further issues for two-sided platforms. When calculating revenue shares, the only reasonable option is to use the sum of revenues on all sides of the platform. Then, such shares should not be interpreted as market shares as they are aggregated over two interdependent markets. Large revenue shares appear to be a meaningful indicator of market power if all undertakings under consideration serve the same sides. However, they are often not meaningful if undertakings active in the relevant markets follow different business models.” Read more

  • Wednesday, 15 May 2019

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