Approaches to Assess Market Power in the Online Networking Market

Shin-Ru Cheng
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Abstract

Facebook, the world’s largest online networking platform, is the subject of multiple antitrust investigations by various state and federal regulators. Yet scholars and practitioners remain divided on how to measure Facebook’s market power. Some argue that conventional approaches for identifying market power are suitable for the online networking market. This Article argues such conventional approaches are inadequate for assessing market power in online networking markets.This Article begins by introducing the traditional approaches that courts have employed to assess market power: the direct effects approach, the Lerner Index approach, and the market share approach. It next describes Facebook’s business model and shows that, because Facebook is a two-sided market, these traditional approaches should not be applied to Facebook.Instead, the Article proposes that the information gaps, switching costs, and entry barriers approaches are better suited for assessing the market power of online networking platforms. The Article thus concludes by proposing a legal framework for assessing market power in online networking platforms which employs such non-traditional approaches. While this Article uses Facebook as the main case study, this paper’s findings are equally applicable to similar online networking platforms.
在线网络市场中市场力量的评估方法
Facebook是全球最大的在线社交平台,目前正受到多个州和联邦监管机构的多起反垄断调查。然而,学者和实践者在如何衡量Facebook的市场力量方面仍存在分歧。一些人认为,传统的识别市场力量的方法适用于在线网络市场。本文认为,这种传统方法不足以评估在线网络市场中的市场力量。本文首先介绍了法院用来评估市场力量的传统方法:直接效应法、勒纳指数法和市场份额法。接下来,它描述了Facebook的商业模式,并表明,因为Facebook是一个双边市场,这些传统的方法不应该适用于Facebook。相反,本文提出信息差距、转换成本和进入壁垒方法更适合于评估在线网络平台的市场力量。因此,本文最后提出了一个评估采用这种非传统方法的在线网络平台市场力量的法律框架。虽然本文使用Facebook作为主要案例研究,但本文的研究结果同样适用于类似的在线网络平台。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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