Affiliate Roger Ware Discusses Two-Sided Markets in ABA Teleseminar

February 15, 2013

Antitrust agencies have done a reasonable job addressing core economic questions raised in cases involving two-sided markets, particularly given the limitations of the tools at their disposal, said Queens University professor and Analysis Group academic affiliate Roger Ware. He shared these observations during a January 24, 2013 teleseminar on the economic and litigation issues associated with two-sided markets in the United States and Canada. The event was sponsored by the Economics Committee of the American Bar Association and the Law & Economics Committee of the Canadian Bar Association.

The panelists, who also included David Evans of the Global Economics Group and Leah Brannon of Cleary Gottlieb, noted that there has been a marked increase in the development of academic literature on two-sided markets over the past 10 years. However, industrial-organization models and theories can take time to work their way into the world of antitrust litigation, the panelists said, and they are still in transition when it comes to two-sided markets.

Standard tools, such as the hypothetical monopolist test, have important limitations when applied to assess multisided platform issues, Professor Ware explained, given the inherently complementary relationships between the different segments of the market being examined. The panelists cited examples in the newspaper industry and in the payment-card market.