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Price Discrimination against Multi-Clouders

Author

Listed:
  • Jihwan Do

    (Yonsei University)

  • Jeanine Miklos-Thal

    (University of Rochester)

Abstract

The cloud services industry, which is currently dominated by a few large providers, has come under scrutiny from antitrust authorities worldwide. One concern is that "egress fees"-charges for transferring data out of a provider's cloud-could harm competition and welfare by discouraging multi-clouding, whereby a user combines services from several providers. Motivated by this policy concern, we analyze the effects of banning price discrimination against multi-stop shoppers in a market where multi-product firms sell complementary goods to buyers with elastic demands, and multi-stop shoppers impose higher service costs than one-stop shoppers. We find that if buyers are locked into a specific product combination, then a ban on price discrimination against multi-stop shoppers raises social welfare for a wide range of demand functions. If product choices are endogenous and buyers' product preferences are weak, however, then a ban on price discrimination tends to harm social welfare.

Suggested Citation

  • Jihwan Do & Jeanine Miklos-Thal, 2025. "Price Discrimination against Multi-Clouders," Working papers 2025rwp-250, Yonsei University, Yonsei Economics Research Institute.
    • Handle: RePEc:yon:wpaper:2025rwp-250
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    References listed on IDEAS

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    4. Dirk Bergemann & Rahul Deb, 2025. "Robust pricing for cloud computing," Papers 2502.07168, arXiv.org.
    5. Dirk Bergemann & Michael C. Wang, 2025. "Optimal Pricing of Cloud Services: Committed Spend under Demand Uncertainty," Papers 2502.08022, arXiv.org.
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