Tuesday, January 23, 2024

Most major platforms sell many of their own products, which typically results in direct competition between the platform and its own business users. A firm may exploit its control of a dominant platform to undermine competition in adjacent product markets, such as by excluding competitors from the platform or making their product listings hard to find. Alternatively, it might engage in milder acts of “self-preferencing,” such as ranking its own products first in search results. In American antitrust law, antiquated legal doctrine generally places these acts within a special class of unilateral conduct that is almost impossible to challenge. Thus, existing antitrust law does almost nothing to prevent platforms from excluding rivals in adjacent markets, so long as they do so through unilateral conduct.

This Article suggests a new antitrust framework for policing unilateral platform conduct in a practicable way that is consistent with antitrust principles. When it is anticompetitive, the conduct in question typically raises the same concerns as the tying arrangement in the famous Microsoft case—namely, that a vertically integrated firm is exploiting a dominant platform to foreclose rivals in an adjacent market. As such, courts should evaluate most unilateral platform conduct under a revised liability standard that resembles the one applied in Microsoft, rather than the idiosyncratic and inapposite rules applied under existing law. After sketching out the basic proposal, the bulk of the Article focuses on applying it to real-world cases, such as analyzing foreclosure, defining markets, overcoming proof difficulties, and evaluating potential defenses.

Read PDF