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Out-Of-Market Efficiencies, Two-Sided Platforms, And Consumer Welfare: A Legal And Economic Analysis

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  • Francesco Ducci

Abstract

This article analyzes the scope of out-of-market efficiencies in competition policy from a legal and economic perspective. It identifies potential shortcomings in neglecting their relevance, both in relation to the economic principles of two-sided platforms and, more generally, in the fulfillment of the consumer welfare standard. This article tackles this issue by looking at the specific condition laid out in Article 101(3) of the Treaty on the Functioning of the European Union, requiring that a fair share of efficiency benefits must be passed on to consumers in order to justify an otherwise anticompetitive agreement. The implications of forbidding or allowing aggregation of efficiencies across markets are examined with reference to the two-sided market of payment card systems and the anticompetitive concerns regarding Multilateral Interchange Fees.

Suggested Citation

  • Francesco Ducci, 2016. "Out-Of-Market Efficiencies, Two-Sided Platforms, And Consumer Welfare: A Legal And Economic Analysis," Journal of Competition Law and Economics, Oxford University Press, vol. 12(3), pages 591-622.
    • Handle: RePEc:oup:jcomle:v:12:y:2016:i:3:p:591-622.
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    File URL: http://hdl.handle.net/10.1093/joclec/nhw018
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    Cited by:

    1. Baranes, Edmond & Cortade, Thomas & Cosnita-Langlais, Andreea, 2019. "Horizontal mergers on platform markets: cost savings v. cross-group network effects?," MPRA Paper 97459, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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