IDEAS home Printed from https://ideas.repec.org/a/sae/crnind/v21y2020i4p315-343.html

The regulation of zero-price markets by the competition authorities in the USA and the EU

Author

Listed:
  • Stephen Jarman

    (Department of Economics, 14915Universität Hamburg, Hamburg, Germany)

  • Deniz D. Karaman Örsal

    (Department of Economics, 14915Universität Hamburg, Hamburg, Germany)

Abstract

The modern economy is flooded with products that have no monetary price. However, it is becoming something of an established fact that many zero-price products are not ‘free’ but rather incur costs for consumers in other ways. Many governments intervene in markets when consumers are not being given a fair price for their products. If the costs to consumers for some products are not monetary however, how can governments evaluate whether the costs that consumers are incurring are too high? We seek to answer this question by assessing the approaches of the US and the EU to zero-price markets as informed by their legal and ideological traditions. We offer potential policy solutions while outlining the difficulties that accompany government intervention in zero-price markets and the obstacles when it comes to measuring non-monetary forms of consumer cost.

Suggested Citation

  • Stephen Jarman & Deniz D. Karaman Örsal, 2020. "The regulation of zero-price markets by the competition authorities in the USA and the EU," Competition and Regulation in Network Industries, , vol. 21(4), pages 315-343, December.
    • Handle: RePEc:sae:crnind:v:21:y:2020:i:4:p:315-343
    DOI: 10.1177/1783591720943756
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1783591720943756
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1783591720943756?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    2. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    3. Rey, Patrick & Tirole, Jean, 2007. "A Primer on Foreclosure," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 33, pages 2145-2220, Elsevier.
    4. Audretsch, David B. & Baumol, William J. & Burke, Andrew E., 2001. "Competition policy in dynamic markets," International Journal of Industrial Organization, Elsevier, vol. 19(5), pages 613-634, April.
    5. Justin P. Johnson, 2013. "Targeted advertising and advertising avoidance," RAND Journal of Economics, RAND Corporation, vol. 44(1), pages 128-144, March.
    6. Nicholas Economides, 2001. "The Microsoft Antitrust Case: Rejoinder," Journal of Industry, Competition and Trade, Springer, vol. 1(1), pages 71-79, March.
    7. Varian,Hal R. & Farrell,Joseph & Shapiro,Carl, 2004. "The Economics of Information Technology," Cambridge Books, Cambridge University Press, number 9780521605212, January.
    8. Mark Armstrong & Robert Porter (ed.), 2007. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 3, number 1.
    9. Wolfgang Kerber, 2016. "Digital Markets, Data, and Privacy: Competition Law, Consumer Law, and Data Protection," MAGKS Papers on Economics 201614, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    10. Nicholas Economides, 1997. "The Economics of Networks," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 1(0), December.
    11. Nicholas Economides, 2001. "The Microsoft Antitrust Case," Journal of Industry, Competition and Trade, Springer, vol. 1(1), pages 7-39, March.
    12. Michael L. Katz & Carl Shapiro, 1994. "Systems Competition and Network Effects," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 93-115, Spring.
    13. Jordi Gual & Núria Mas, 2011. "Industry Characteristics and Anti-Competitive Behavior: Evidence from the European Commission’s Decisions," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 39(3), pages 207-230, November.
    14. Choi, Jay Pil & Stefanadis, Christodoulos, 2001. "Tying, Investment, and the Dynamic Leverage Theory," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 52-71, Spring.
    15. William E. Kovacic & Carl Shapiro, 2000. "Antitrust Policy: A Century of Economic and Legal Thinking," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 43-60, Winter.
    16. Paul Belleflamme & Martin Peitz, 2018. "Platforms and network effects," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume II, chapter 11, pages 286-317, Edward Elgar Publishing.
    17. Michael D. Whinston, 2001. "Exclusivity and Tying in U.S. v. Microsoft: What We Know, and Don't Know," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 63-80, Spring.
    18. Murillo, David & Buckland, Heloise & Val, Esther, 2017. "When the sharing economy becomes neoliberalism on steroids: Unravelling the controversies," Technological Forecasting and Social Change, Elsevier, vol. 125(C), pages 66-76.
    19. Nicholas Economides & Ioannis Lianos, 2009. "A Critical Appraisal of Remedies in the EU Microsoft Cases," Working Papers 09-29, NET Institute, revised Dec 2009.
    20. S. J. Liebowitz & Stephen E. Margolis, 1994. "Network Externality: An Uncommon Tragedy," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 133-150, Spring.
    21. Kenney, Martin & Pon, Bryan, 2011. "Structuring the Smartphone Industry. Is the Mobile Internet OS Platform the Key?," Discussion Papers 1238, The Research Institute of the Finnish Economy.
    22. Martin Kenney & Bryan Pon, 2011. "Structuring the Smartphone Industry: Is the Mobile Internet OS Platform the Key?," Journal of Industry, Competition and Trade, Springer, vol. 11(3), pages 239-261, September.
    23. Kesler, Reinhold & Kummer, Michael E. & Schulte, Patrick, 2017. "Mobile applications and access to private data: The supply side of the Android ecosystem," ZEW Discussion Papers 17-075, ZEW - Leibniz Centre for European Economic Research.
    24. Kevin J. Boudreau & Lars B. Jeppesen, 2015. "Unpaid crowd complementors: The platform network effect mirage," Strategic Management Journal, Wiley Blackwell, vol. 36(12), pages 1761-1777, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oz Shy, 2011. "A Short Survey of Network Economics," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 38(2), pages 119-149, March.
    2. Riccardo Leoncini & Francesco Rentocchini & Giuseppe Vittucci Marzetti, 2008. "You Won the Battle. What about the War? A Model of Competition between Proprietary and Open Source Software," Department of Economics Working Papers 0811, Department of Economics, University of Trento, Italia.
    3. A. Bassanini & G. Dosi, 1998. "Competing Technologies, International Diffusion and the Rate of Convergence to a Stable Market Structure," Working Papers ir98012, International Institute for Applied Systems Analysis.
    4. Puffert, Douglas J., 2002. "Path Dependence in Spatial Networks: The Standardization of Railway Track Gauge," Explorations in Economic History, Elsevier, vol. 39(3), pages 282-314, July.
    5. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & David P. McIntyre & Arati Srinivasan, 2017. "Networks, platforms, and strategy: Emerging views and next steps," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 141-160, January.
    6. Jullien, Bruno, 2001. "Competing with Network Externalities and Price Discrimination," CEPR Discussion Papers 2883, C.E.P.R. Discussion Papers.
    7. Parker Wheatley W., 2012. "Using Experiments to Illustrate the Role of Network Externalities in Technology Adoption and Industry Evolution," Journal of Industrial Organization Education, De Gruyter, vol. 6(1), pages 1-13, December.
    8. Takahashi, Takuma & Namiki, Fujio, 2003. "Three attempts at "de-Wintelization": Japan's TRON project, the US government's suits against Wintel, and the entry of Java and Linux," Research Policy, Elsevier, vol. 32(9), pages 1589-1606, October.
    9. Daniel Birke, 2009. "The Economics Of Networks: A Survey Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 762-793, September.
    10. Heli Koski & Tobias Kretschmer, 2004. "Survey on Competing in Network Industries: Firm Strategies, Market Outcomes, and Policy Implications," Journal of Industry, Competition and Trade, Springer, vol. 4(1), pages 5-31, March.
    11. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, January.
    12. Kiwit Daniel, 1996. "Path-Dependence In Technological And Institutional Change – Some Criticisms And Suggestions," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 7(1), pages 69-94, March.
    13. Jörg Freiling, 2015. "Getting off the Track to Found – The Influence of Path Dependence on the Entrepreneurial Process (Zbaczajac z drogi ku zalozeniu przedsiebiorstwa – wplyw zaleznosci od szlaku na proces przedsiebiorczy," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 13(56), pages 13-37.
    14. Belleflamme, Paul, 1998. "Adoption of network technologies in oligopolies," International Journal of Industrial Organization, Elsevier, vol. 16(4), pages 415-444, July.
    15. Kevin J. Boudreau, 2012. "Let a Thousand Flowers Bloom? An Early Look at Large Numbers of Software App Developers and Patterns of Innovation," Organization Science, INFORMS, vol. 23(5), pages 1409-1427, October.
    16. H. Peyton Young, 1996. "The Economics of Convention," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 105-122, Spring.
    17. Vanberg, Margit A., 2005. "Network Externalities and Interconnection Incentives," ZEW Discussion Papers 05-80, ZEW - Leibniz Centre for European Economic Research.
    18. Heinrich, Torsten, 2015. "A Replicator Dynamic and Simulation Analysis of Network Externalities and Compatibility Among Standards," MPRA Paper 67198, University Library of Munich, Germany.
    19. Garcia-Swartz, Daniel D. & Garcia-Vicente, Florencia, 2015. "Network effects on the iPhone platform: An empirical examination," Telecommunications Policy, Elsevier, vol. 39(10), pages 877-895.
    20. Deishin Lee & Haim Mendelson, 2007. "Adoption of Information Technology Under Network Effects," Information Systems Research, INFORMS, vol. 18(4), pages 395-413, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:crnind:v:21:y:2020:i:4:p:315-343. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.