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Distinguishing between "platforms" and "aggregators" in competition law

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There's a lot of political will to regulate the Big Tech companies in both the US and the EU at the moment, which is a very welcome juncture to have arrived at after 40 years of antitrust inaction during which companies were permitted to grow by buying nascent competitors, merging with major competitors and cornering vertical markets -- all classic anticompetitive behaviors that Reagan and his successors legalized. But regulating Big Tech isn't enough: we have to regulate them effectively. The wrong rules (like the EU's Copyright Directive) can simply cement their dominance. And, of course, we want to take care to extinguish only bad, anticompetitive behaviors, not those that give rise to the parts of tech that we love and value. Veteran tech analyst Ben Thompson wrote an essay to accompany a talk he's giving at the Antitrust in Times of Upheaval conference, in which he tries to cleave tech monopolists into two different categories: "platforms" ("a foundation on which entire ecosystems are built") and "aggregators" ("collect a critical mass of users and leverage access to those users to extract value from suppliers"). Thompson proposes that platforms and aggregators have different failure modes when it comes to anticompetitive action, and that each should be regulated differently. Platforms (like Apple's App Store or Microsoft Windows), have enormous power over third parties. If you get kicked out of the App Store, you can no longer sell to Iphone owners, so Apple has lots of opportunities for rent-extraction from its software vendors, like forcing them to use its own payment processor. Read the rest

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