Verticalrestraintsandexclusivity縱向約束與壟斷.ppt

1、Competition Policy in Two-Sided Markets- Some brief remarks,Dr Amelia Fletcher Chief Economist Office of Fair Trading LEAR Conference7th June 2007,NB The views expressed here are my own, and not necessarily those of the OFT,What do certain key factors of 2-sided markets mean for:,Market definition?

2、Predation? Collusion? Exclusive contracts? Media regulation and mergers?,2-sided markets: First key factor,In a typical 2-sided market: DA is function not only of pA but also of qB DB is function not only of pB but also of qA What does this mean for market definition?,Market definition,SSNIP test: C

3、ould a hypothetical monopolist profitably sustain a small but significant and non-transitory increase in price? If no, the relevant antitrust market must be wider If yes, the market is not any wider (but could be narrower) Key question for 2-sided markets: Which feedback loops should be taken into a

4、ccount?,Market definition: Feedback loops,pA,qA,A,A,A,Normal Market: Does total A? If yes, market no wider,?,Market definition: Feedback loops,pA,qA,DB,qB,A,A,B,For given pB,A,Normal Market: Does total A? If yes, market no wider,Feedback to market B,Market definition: Feedback loops,pA,qA,DB,qB,A,A,

5、B,For given pB,A,Normal Market: Does total A? If yes, market no wider,Feedback to market B,Should we take this into account?,Market definition: Feedback loops,pA,qA,DB,qB,DA,qA,A,A,B,A,For given pB,For given pA,A,Normal Market: Does total A? If yes, market no wider,Feedback to market A,Feedback to m

6、arket B,Market definition: Feedback loops,pA,qA,DB,qB,DA,qA,A,A,B,A,For given pB,For given pA,A,Normal Market: Does total A? If yes, market no wider,Feedback to market A,Feedback to market B,Should we take this into account?,Market definition: Feedback loops,pA,qA,DB,qB,DA,qA,A,A,B,A,For given pB,Fo

7、r given pA,A,Normal Market: Does total A? If yes, market no wider,pB,qB,B,Profits dissipated in market B,Feedback to market A,Feedback to market B,Should we take this into account?,Market definition: Feedback loops,pA,qA,DB,qB,DA,qA,A,A,B,A,For given pB,For given pA,A,Normal Market: Does total A? If

8、 yes, market no wider,pB,qB,B,DA,qA,A,Profits dissipated in market B,Feedback to market A,Feedback to market A,Feedback to market B,Market definition: Feedback loops,pA,qA,DB,qB,DA,qA,A,A,B,A,For given pB,For given pA,A,Normal Market: Does total A? If yes, market no wider,pB,qB,B,DA,qA,A,Profits dis

9、sipated in market B,Feedback to market A,Feedback to market A,Feedback to market B,Market definition: Feedback loops,pA,qA,DB,qB,DA,qA,A,A,B,A,For given pB,For given pA,A,Normal Market: Does total A? If yes, market no wider,pB,qB,B,DA,qA,A,Profits dissipated in market B,Feedback to market A,Feedback

10、 to market A,Feedback to market B,2-sided markets: Second key factor,pA will tend to be lower when either: each additional buyer in market A generates significant extra revenue in market B; or it is hard to persuade market A buyers to sign up. More formally (Rochet and Prices well above marginal cos

11、t on the other Such pricing is an efficient response to network externalities. Competition authorities need to be aware of this when assessing predation or excessive pricing We also need to be aware of the waterbed effect, when imposing remedies,However,This does not mean predation (and excessive pr

12、icing) doesnt occur For example, what if pricing structure affects market structure? Specifically, what if pricing low on one side of a market prevents entry into both sides? Can such a pricing structure increase tippability of already tippable markets? But how to assess?,A careful approach is neede

13、d,Low pricing on one side of a two sided market can be exclusionary But application of simple Akzo type test for predation (ie is P AAC?) problematic A possible approach? to apply an Akzo type test, but to employ an opportunity cost benchmark,Collusion on one side of the market,True that increased p

14、rofits from collusion on one side of a market get competed away on the other Does this justify a laissez faire approach? No! Not all additional profits are competed away Prices typically even higher than without collusion, suggesting inefficient price asymmetry But it does make it difficult to deter

15、mine appropriate exemption criteria where relevant,2-sided markets: Third key factor,2-sided markets are often tippable Often observe competition for the market This competition can get rough but should competition authorities intervene? After all a monopoly anyway Does it matter who wins? Yes! And

16、best for both consumers and dynamic competition if the best product wins,2-sided markets: Fourth key factor,The tippability of 2-sided markets is reduced if there is multi-homing on one (or both) side of the market A move to single-homing by a relatively small part of the previously multi-homing sid

17、e of the market can sometimes have major effects.,The effect of single-homing,Buyer 1,Platform A,Seller 1,Buyer 2,Platform B,Seller 2,The effect of single-homing,Buyer 1,Platform A,Seller 1,Buyer 2,Platform B,Seller 2,Exclusivity contracts,Assessment of exclusivity contracts (or refusal to supply) i

18、s complicated in tippy markets: Small scale coverage could tip the balance Interesting that customers do better by being single homing under profit-maximising pricing So no need for profit sacrifice to bribe customers to sign exclusive contracts or to refuse to supply Could multi-homing be a remedy?,2-sided markets: Fifth key factor,The adve