Navigating The Complexities Of Defining Anti- Competitive Behavior In Two-Sided Digital Platforms
- IJLLR Journal
- 1 day ago
- 2 min read
Rafeeque Hussain AK, Research Scholar, Hindustan Institute of Technology & Science (HITS), Padur, Chennai, Tamil Nadu
ABSTRACT
Anti-competitive practices in two-sided digital markets presents significant challenges due to the unique dynamics of these platforms. Unlike traditional markets, two-sided platforms, such as e-commerce marketplaces, search engines, and social media networks connect two distinct user groups, creating interdependencies and network effects that complicate competition assessments. One of the primary challenges is determining market power, as dominance in a digital platform does not always translate to consumer harm. Strong network effects often lead to market concentration, but intervention requires distinguishing between natural monopolies and anti-competitive behaviour. Another issue is the presence of zero-price markets, where platforms offer free services to users while monetizing another group, typically through advertising. Traditional competition metrics, such as pricing power, become less relevant in these cases, making it difficult to establish predatory pricing or monopolistic control. Additionally, multi- homing and switching costs create further complications. While users and businesses may engage with multiple platforms simultaneously, exclusivity agreements, algorithmic biases, and high switching costs can restrict competition. Identifying when these strategies are anti-competitive rather than efficiency-driven is complex. Self-preferencing and data advantages also raise concerns. Platform operators that simultaneously function as marketplace regulators may Favor their own products over third-party sellers, reducing competition. Furthermore, control over vast amounts of user data can create high entry barriers for competitors, reinforcing dominance. Regulatory bodies struggle to define clear legal frameworks that balance competition enforcement with innovation incentives. Overall, the dynamic and rapidly evolving nature of two-sided digital markets demands a nuanced approach to competition law. Existing regulatory tools often fail to capture the complexities of digital platforms, requiring new analytical frameworks and policy measures. Addressing these challenges is essential to ensuring fair competition while fostering technological advancements in the digital economy.
Keywords: Anti-competitive practices, Two-sided markets, Digital platforms, Network effects, Market dominance.
