Self-preferencing and foreclosure in digital markets: Theories of harm for abuse cases

Authors: Massimo Motta

International Journal of Industrial Organization, Vol. 90, September, 2023

Antitrust agencies all over the world have been investigating large digital platforms for practices which may constitute an abuse of dominance. Here I discuss practices (including ‘self-preferencing’ and denial or degradation of interoperability) which can be interpreted as foreclosure in vertically-related or complementary markets. I discuss, in particular, a few high-profile cases involving Amazon, Apple, Facebook and Google. I focus on possible theories of harm for such cases and show that both original simple models and well-established economic theories (adapted or interpreted) provide a rationale for anti-competitive foreclosure.

This paper originally appeared as Barcelona School of Economics Working Paper 1374