Innovation and Competition of Two/Multi-Sided Market: Response from Competition Law

Innovation and Competition of Two/Multi-Sided Market: Response from Competition Law

 

Title
Innovation and Competition of Two/Multi-Sided Market: Response from Competition Law
Author
Ya-Lun Yen
Keywords
Two-Sided Market, Multi-Sided Market, Competition Policy,
Fair Trade Act, Innovation
Abstract
Burgeoning two-sided/multi-sided platforms have brought about new antitrust
issues concerning whether the traditional analytical tools for antitrust review shall
be directly applied to two-sided/multi-sided markets. This article explores the characteristics
of two-sided/multi-sided markets, the competitive strategies of twosided/multi-sided
platforms, and the challenge to and issues of antitrust enforcement
and competition policy arising from two-sided/multi-sided markets. Then in
light of decisions of Taiwan Fair Trade Commission (“Taiwan FTC”) concerning
two-sided/multi-sided markets, the author suggests Taiwan FTC pay more attention
to foreclosure activities adopted by two-sided/multi-sided platforms and their possible
adverse effect to innovation. In addition, Taiwan FTC should also be wary of
the market power possibly enjoyed by the two-sided/multi-sided platforms jointly
established by several large-sized and leading enterprises by means of conglomerate
mergers and its ripple effect. Moreover, the market share of one twosided/multi-sided
platforms owned by a conglomerate operating diverse business should not be calculated based upon the total revenue of that conglomerate. Finally,
to avoid over intervention in innovation and competition of two-sided/multi-sided
markets, Taiwan FTC should rethink if it is appropriate to use 10% market share as
a threshold to evaluate exclusive contracts, tying, or other restrictive activities conducted
by two-sided/multi-sided platforms.
Abstract Article

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