Self-Preferencing and Foreclosure in Digital Markets: Theories of Harm for Abuse Cases

• Authors: Massimo Motta.
• BSE Working Paper: 112308 | December 22
• Keywords: two-sided markets , digital platforms , self-preferencing , abuse of dominance , monopolization , exclusionary practices , vertical foreclosure
• JEL codes: D40, K21,L10, L40
• two-sided markets
• digital platforms
• self-preferencing
• abuse of dominance
• monopolization
• exclusionary practices
• vertical foreclosure

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 ‘selfpreferencing’ 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.