Document Type

Article

Publication Date

7-30-2025

Abstract

Most antitrust offenses require proof of the defendant’s market power, or ability to control the market and raise prices above cost. For example, many exclusive contracts are harmless and lawful in competitive markets, but they can become anticompetitive when the firm imposing them has significant market power.

The internet has created a large commercial market that rightfully merits attention from antitrust and competition law authorities. Much of the popular press and even some antitrust decisions treat the internet as a market unto itself. Unfortunate dicta in the Supreme Court’s Amex decision seemed to confirm this. The Court stated that “only other two-sided platforms can compete with a two-sided platform for transactions.” For a few products this is true, but not for most others. The implications for market definition are staggering. For example, Amazon’s share of ecommerce is around 40%, but its share of all commerce is 4%. So which is it? It is long past time to “normalize” online markets by treating them as markets, no different in principle from other markets. They are factually distinctive in some ways, but all markets differ from one another in detail. The only way to determine the scope of a relevant antitrust market is to identify the particular product in question and then make the best measurements that the data permit concerning the range of effective substitutes from all sources, both demand and supply. Market definition in antitrust cases presents a question of fact. This makes empirical study of consumer behavior essential, including such things as the ease and frequency of consumer switching and the range of realistically available alternatives. When this is done it becomes clear that some antitrust markets are properly limited to ecommerce. Others are properly limited to traditional commerce. For a large group in the middle, however, the market includes both

Publication Title

Stanford Law & Policy Review

Publication Citation

36 Stan. L. & Pol'y Rev. 147 (2025)

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