The Roles of Innovation in Competition Law Analysis
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The Roles of Innovation in Competition Law Analysis

Edited by Paul Nihoul and Pieter Van Cleynenbreugel

Rapid technological innovations have challenged the conventional application of antitrust and competition law across the globe. Acknowledging these challenges, this original work analyses the roles of innovation in competition law analysis and reflects on how competition and antitrust law can be refined and tailored to innovation.
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Chapter 13: Tying and two-sided digital platforms

Petri Kuoppamäki

Abstract

There is (still) a lot of confusion around the question of how to deal with two-sided platforms in an Article 102 TFEU context. On the one hand, there are situations where the two-sidedness of the market explains why it makes perfect sense in terms of business to provide the service “below cost” or even “for free” or why it is necessary to “tie” the customer. If this element is disregarded it would lead to the wrong conclusion that there is an abuse, although we are dealing with a normal characteristic of the market (type I mistake). On the other hand, the two-sidedness of the market does not lead to immunity from competition laws. It would be wrong to assume that because a market is a two-sided market, showing some complementarities would suffice to make tying that prevents market entry legal. While this kind of hands-off approach is sometimes suggested in the literature, in practice if adopted it would lead to a serious under-enforcement of competition rules (type II mistake). Hence, there is a need to apply antitrust law to harmful tying practices of two-sided digital platforms. Harm can occur, for instance, if the two-sided market and contractual practices are such that market access is hindered. This chapter explores the possibilities and difficulties the application of antitrust law in this particular context is likely to generate.

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