Beyond exclusion: revisiting exploitative abuses in digital platform markets

Abstract

With the rapid expansion of digital platforms, concerns regarding exploitative practices have gained prominence, necessitating a closer examination of the possibilities available to competition authorities to address them. In light of the higher error costs of enforcement compared to exclusionary abuses, scholars have come up with structured approaches to identify in which situations exploitative abuse actions are justified. However, these approaches are mostly geared towards excessive prices and have not been adapted to digital platform markets, where customers and consumers are more likely to encounter unfair trading conditions. The aim of this article is to examine the extent to which the structured approaches developed in the literature are applicable to cases of unfair trading conditions by digital platforms. In order to do so, we first review the literature to establish the most widely supported conditions under which intervening against excessive price is justified. We identify the following conditions: (i) the presence of high and non-transitory barriers to entry; (ii) an enhanced dominant position; (iii) the absence of sector-specific regulation; and (iv) enhanced consumer harm. We then apply those conditions to exploitative abuse cases in digital platform markets and propose adjustments to ensure they are appropriate to guide competition authorities’ intervention.