Ariel Ezrachi and Maurice Stucke:
An e-monopsonist and his cousin the e-scraper are robbing an upstream bank. The alarm is triggered. The nearby antitrust enforcer, seeing them holding bags of cash, asks: ‘Have you seen any suspects running away from the scene?’
Let us unpack this tale’s moral.
With the rise of Google, Amazon, Facebook and other ‘super-platforms,’ we tend to look down rather than up. It seems like Google, Amazon, and Facebook are using their power in the marketplace to deliver great value to us — wrestling lower prices from producers in the case of Amazon, bringing news onto a single platform in the case of Facebook, and organizing the world’s information, in the case of Google.
While these companies appear to be furthering our interests, a closer look reveals how these super-platforms may wield their power downstream to harm us, the consumer. As our book Virtual Competition explores, the super-platforms can use our personal data to better price discriminate and their disincentive to protect our privacy (and promote technologies that do).
Less discussed, but of significant concern, are the upstream effects of these super-platforms. They are in fact harming many of the companies from whom they buy or acquire content — and that harm ultimately harms us. Our competition laws deal with this kind of buyer power. These concerns, however, are often low on the enforcement agenda due to the indirect effects on consumer welfare. In the digital age, that urgently needs to change.