Washington — The Computer & Communications Industry Association has filed an amicus brief on how the Supreme Court should look at multi-sided business models from an antitrust perspective when it hears the upcoming Ohio v. American Express case. While CCIA does not weigh in on the substance of the financial services issues impacting merchant fees, the tech trade association does argue that constraints on all sides of a multi-sided firms should be considered when analyzing if a plaintiff has made out a prima facie case of anticompetitive conduct. The American Express case represents the first time that an antitrust dispute involving “multi-sided markets” — where a third party service provider is in the business of uniting buyers with sellers — has come before the Supreme Court of the United States.
CCIA has advocated on competition policy issues since it was founded 45 years ago. The following can be attributed to CCIA President & CEO Ed Black:
“The reason we filed this brief is market power in multi-sided businesses needs to be analyzed with the right approach and economic analysis. This case could set precedent and it is important for innovation and for our economy to get it right.”
Some additional background on this case and multi-sided markets:
- “Two-sided markets” or “multi-sided firms” is a term of art in the theoretical economics literature that refers to business models that have multiple sets of customers, such as many of CCIA’s members.
- Multi-sided businesses operate under complex economic dynamics as they must consider the effects of their pricing and output decisions on both sets of customers, as well as the interrelationship among the customers on each side of their business.
- Whether a multi-sided firm has market power or not requires consideration of the actual effects of multi-sidedness. Ignoring these competitive realities would risk penalizing healthy competition to the detriment of consumers.