HomeWebcastThe Antitrust Analysis of Multi-Sided Platform Businesses
Online CLE Antitrust Analysis CLE

The Antitrust Analysis of Multi-Sided Platform Businesses

Live Webcast Date: Wednesday, April 17, 2019 from 12:00 pm to 1:00 pm (ET)
Business and Corporation CLE & CPERecording

Online CLE Antitrust Analysis

Join us for this Knowledge Group Online CLE Antitrust Analysis Webinar. The introduction of the digital economy paved way for the explosive growth of multi-sided platforms. Many of the largest firms in the business industry including Google, Amazon, Apple, and Facebook are among these platforms that connect customers to "facilitate a single, simultaneous transaction". Recently, the Supreme Court issued a landmark decision in Ohio v. American Express which addressed the appropriate analysis of alleged anticompetitive conduct in these markets.

Therefore, it becomes more important for antitrust litigants and authorities to be in the know of the latest rules and provisions on the antitrust analysis of multi-sided platform businesses.

Our panel of key thought leaders and practitioners will offer a discussion of the fundamentals as well as updates regarding the latest and significant issues surrounding the Antitrust Analysis of Multi-Sided Platform Businesses (e.g. Google, Amazon). This webcast aims to help avoid common pitfalls and risk issues that may arise in proving anticompetitive practices when dealing with interconnected multisided platform businesses.

Key topics include:

  • The Antitrust Analysis of Multi-Sided Platform Businesses in 2019
  • The New Economics of Multi-Sided Platforms Businesses
  • Most Notable Cases
  • Market Definition and Market Power
  • Ohio et al vs. American Express
  • Implications of Recent Decisions

Who Should Attend

  • Antitrust Lawyers
  • Business Analysts
  • Business Managers
  • Business Executives
  • Corporate Counsel
  • In-house Counsel
  • Compliance Officers
  • Regulatory and Policy Managers
  • Other Related/Interested Professionals and Organizations

Faculty

Online CLE Antitrust Analysis
Dr. Qian Lu
Principal Consultant
Edgeworth Economics, L.L.C.
Online CLE Antitrust Analysis
Natalie A. Fleming Nolen
Partner
Morrison & Foerster LLP

Click Here to Read Additional Material

Online CLE Antitrust Analysis

SEGMENT 1:
Dr. Qian Lu, Principal Consultant
Edgeworth Economics, L.L.C.
  • Introduction: First, I will introduce the definition and the types of multi-sided platforms (e.g. transactional vs non-transactional). My subsequent discussions will focus on transactional multi-sided platforms. 
  • Relevant market definition: Defining the relevant market is usually the first step in an antitrust analysis. Therefore, I next discuss the economic framework in defining the relevant market involving multi-sided platforms, taking into consideration unique characteristics of multi-sided platforms, such as indirect network effect and user multi-homing.
  • Market power: I then turn to discussions on assessment of market power. Specifically, I will cover 1) why the standard results from one-sided markets do not apply directly to multi-sided markets; and for multi-sided markets 2) whether market share can be used to presume dominance, and 3) how to consider the impact of multi-sidedness in assessing market dominant position and barrier to entry.

SEGMENT 2:
Natalie A. Fleming Nolen, Partner
Morrison & Foerster LLP
  • Pricing in multi-sided platforms
    • Courts have begun to grapple with issues related to pricing in multi-sided platforms.
    • Plaintiffs tend to argue that prices should be set with one market in mind, ignoring the effects on the other side of the market.
    • But traditional pricing principles may not apply.
    • Sometimes, in an effort to efficiently balance the two sides of the market, one side is charged much more than the other side.
    • In some cases, one side may even have a zero, or negative price.
      • For example Adobe only charges one side of the market and not the other.
    • It is an open legal question exactly how companies can set prices in two-sided markets and not be accused of supra-competitive pricing.
  • Examples of pricing models in multi-sided market
    • Uber - ride sharing app bringing together drivers and riders.
      • Uber facilitates payment of the fare and collects a percentage of the fare as a software licensing fee; driver is paid the remainder.
      • Plaintiffs have alleged that drivers cannot compete with one another on price and cannot determine the price of fares.
    • Etsy - hosts virtual store fronts for handmade or vintage goods.
      • This platform sets prices differently than Uber.
      • Sellers pay a small listing fee per item.
      • Sellers are responsible for pricing their items.
    • Payment Cards- bringing together merchants and cardholders.
      • American Express- contracts directly with cardholders and merchants, and creates rules and sets fees for cardholders and merchants.
      • Visa and MC- have banks contract with merchants and cardholders, but create rules and fee transfers to facilitate network efficiencies.
  • There are several pricing efficiencies with multi-sided platforms
    • Multi-sided platforms are able to set prices for non-employee vendors/contractors where procompetitive benefits flow from the development of the platform.
    • Contrast Uber with Other Companies.
      • Uber facilitates payment of the fare and collects a percentage of the fare as a software licensing fee.  The driver is paid the remainder.
      • Other companies facilitate sales but vendors are responsible for setting their own pricing. 
  • There are also potential pricing pitfalls
    • The case law is evolving and that leaves some uncertainty as to how courts will determine the competitive “price” for multi-sided platforms.
    • There is an uptick in litigation addressing these issues, where plaintiffs are trying to define markets and one-sided when defendants argue they are multi-sided.
      • For example in the Sabre case in the SDNY, a jury found that the market was one-sided when defendant argued it was a two-sided market.  See U.S. Airways, Inc. v. Sabre Holdings Corp., et al., No. 11 Civ. 2725 (LGS), S.D.NY. (Jury Verdict, December 12, 2017).
    • Companies must consider any horizontal elements in the platform that plaintiffs will argue should be given per se treatment.  If not analyzed under the rule of reason, then procompetitive benefits may not be considered.
  • Case Law Examples
    • Courts have grappled to varying degrees with issues related to multi-sided platforms.  Plaintiffs are alleging violation in several markets.
      • Amex Decision
        • Ohio v. American Express, 585 U.S. ___; 138 S. Ct. 2274 (2018)
        • Important Supreme Court decision addressing two-sided market decision.
        • Court said:  “Evidence of a price increase on one side of a two-sided transaction platform cannot by itself demonstrate an anticompetitive exercise of market power.  To demonstrate anticompetitive effects on the two-sided credit card market as a whole, the plaintiffs must prove that Amex’s antisteering provisions increased the cost of credit-card transactions above a competitive level, reduced the number of credit card transactions or otherwise stifled competitive in the credit-card market.”
      • Interchange Litigation
        • Pending payment card litigation.
        • Plaintiffs, in light of American Express decision, have to deal with two-sided market. 
        • Plaintiffs challenge Visa and MC pricing but also allege a “horizontal” or “hub and spoke” conspiracy by the banks.
      • Uber Litigation
        • Meyer v. Kalanick, No. 15-cv-09796-JSR (Filed December 16, 2015).
        • District court denied a MTD litigation alleging Uber is “price-fixing” fares under both horizontal and vertical theories.  Meyer v. Kalanick, 174 F. Supp. 3d 817 (S.D.N.Y. March 31, 2016).
        • Case has been sent to arbitration and is no longer pending in district court.
      • Apple E-books case
        • United States v. Apple Inc., 952 F. Supp. 2d 638 (S.D.N.Y. 2013).
        • Court found per se liability for “hub and spoke” conspiracy, affirmed by the Second Circuit. United States v. Apple Inc., 791 F.3d 290, 296, 311 (2d Cir. 2015).
        • This case is important because of the possibility that courts will consider platforms as hub and spoke or horizontal conspiracies, even if the party facilitating the platform considers its agreements vertical. 
        • Horizontal agreements that receive per se treatment are not given the benefit of pro-competitive benefits and rationales.
  • Concluding Thoughts
    • Companies in multi-sided platforms should keep track of case law, as courts are being asked to consider pricing issues.
    • At the same time, traditional antitrust case law may provide useful touch points.
      • E.g. ASCAP and BMI music licensing analogy.
    • It is important to document and think about the efficiency enhancing, pro-competitive rationales for pricing.  This will help if anyone challenges the pricing decision as being based on anticompetitive rationale.
      • It is also important to exercise caution in all public statements regarding pricing rationales.

Online CLE Antitrust Analysis

Online CLE Antitrust Analysis

Dr. Qian LuPrincipal ConsultantEdgeworth Economics, L.L.C.

Dr. Lu is an expert in the areas of antitrust, intellectual property, and labor and employment. She brings a background in economic research and computer programming, which allows her to analyze and curate intricate datasets for clients.

In the area of antitrust, she conducts economic analyses related to allegations of monopolization, price fixing, and exclusive dealing. She has extensive experience analyzing the competitive effects in cases involving abuse of dominance and mergers and acquisitions in a wide variety of industries, such as e-commerce, electronic devices, automotive parts, consumer products, and manufacturing. In intellectual property, Dr. Lu has applied economic and econometric skills to analyze reasonable royalty and evaluate the intellectual property at issue in patent and copyright infringement disputes. Dr. Lu has specific experience in employment discrimination and wage and hours matters. She has provided economic testimony and consulting on issues related to age and gender discrimination.

Online CLE Antitrust Analysis

Natalie A. Fleming NolenPartnerMorrison & Foerster LLP

Natalie Fleming Nolen is a partner in the Litigation Department of Morrison & Foerster’s Washington D.C. office. She is a trial lawyer who focuses on complex civil litigation with an emphasis on antitrust litigation and financial services litigation. Recent representative matters include the defense of a financial institution in a large multi-district antitrust litigation; representation of clients in complex antitrust arbitrations; defense of a client in a large multi-district cartel litigation; representation of clients before federal agencies, such as the Consumer Financial Protection Bureau and the Federal Trade Commission; and consumer class actions alleging breaches of contract and violation of the Truth in Lending Act.

Ms. Fleming Nolen has strived to increase diversity in the legal profession, including mentoring young lawyers, being actively involved in recruiting efforts and being a member of firm committees and affinity groups. For her efforts, Ms. Fleming Nolen was named an NALP Diversity Champion in 2010.

Online CLE Antitrust Analysis

Course Level:
   Intermediate

Advance Preparation:
   Print and review course materials

Method Of Presentation:
   On-demand Webcast

Prerequisite:
   General knowledge of antitrust laws

Course Code:
   148186

NY Category of CLE Credit:
   Areas of Professional Practice

Total Credit:
    1.0 CLE

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About the Knowledge Group

The Knowledge Group

The Knowledge Group has been a leading global provider of Continuing Education (CLE, CPE) for over 13 Years. We produce over 450 LIVE webcasts annually and have a catalog of over 4,000 on-demand courses.

About the Knowledge Group

The Knowledge Group

The Knowledge Group has been a leading global provider of Continuing Education (CLE, CPE) for over 13 Years. We produce over 450 LIVE webcasts annually and have a catalog of over 4,000 on-demand courses.

Edgeworth Economics provides quantitative and economic consulting in the course of litigation and business to its clients, which include world-class law firms, Fortune 500 companies, and government agencies. Edgeworth experts apply their knowledge and experience, along with state-of-the-art computing infrastructure, to help clients efficiently manage complex issues including antitrust litigation, class actions, consumer financial services, data and HR analytics, employment and labor, intellectual property, mergers and acquisitions, privacy and data security, and transfer pricing. As a growing firm with a fresh approach, Edgeworth attracts leaders and teachers from across the industry including PhD economists, MBAs, statisticians, and programmers. Edgeworth has offices in Pasadena, San Francisco, Toronto, and Washington, DC.

Website: https://edgewortheconomics.com/

With approximately 1,000 lawyers in 16 offices, Morrison & Foerster is a preeminent global law firm dedicated to delivering business-oriented results to clients across the United States, Europe and Asia. Dynamic technology and life science companies, large financial institutions, leading consumer product companies and other market leaders come to MoFo for knowledge, innovation and business aptitude. MoFo handles some of the world’s largest crossborder transactions and resolves major disputes across multiple jurisdictions. The firm has a long-standing commitment to pro bono work and social justice.

Website: https://www.mofo.com/

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