Published May 26, 2015 | Version v1
Conference paper Open

Monopolies on Social Network Services (SNS) Markets and Competition Law

  • 1. Heinrich Heine University Düsseldorf, Germany


Research questions: (1) How can we explain the development of monopolies
on SNS markets? (2) Are monopolies possibly temporarily limited? (3) What
does this mean for competition (or antitrust) law?
Results: (1) Direct network effects (number of users) and indirect network
effects (complementary products and advertising) facilitate the development
of one standard und thus a quasi-monopoly. There is empirical evidence that
there are indeed standards on SNS markets (Facebook in the U.S. and Germany,
Vkontakte in Russia). (2) The standards seem to be temporary monopolies.
Yet, no innovator survived as a standard. (3) The dominant market
position of a standard on the SNS market alone is no problem for Article 102
of the Treaty on the Functioning of the European Union (TFEU). But if a
dominant company tries to immunize its leading position (e.g. by mergers
and acquisitions), such behavior can be scrutinized. On two-sided markets, it
would be possible to define the relevant market much broader than the small
SNS market. When we consider the whole online advertising market as relevant,
many of Article 102’s problems are avoided.



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