Anti-competitive Mergers in Two-sided Digital Platform Markets
(2021) 33 SAcLJ 202
Digital platforms pose a number of challenges to regulators around the world. In particular, markets where digital platforms operate tend towards monopolies due to strong network effects, large economies of scale and scope, close to zero marginal costs and increasing returns to the use of data. On the other hand, ostensibly anti-competitive conduct by traditional businesses may in fact be innocuous or even welfare-enhancing when initiated by digital platforms due to their “two-sided” nature. This article critically evaluates the recent infringement decision of the Competition and Consumer Commission of Singapore regarding Uber’s sale of its Southeast Asian business to Grab pursuant to the contemporary law and economics literature on two-sided digital platforms. Unfortunately, “one-sided” competition analysis continues to be erroneously applied to digital platforms with a “two-sided” nature. Some proposals on how merger control should be reformed in light of these deficiencies are also provided.