Jean-Charles Rochet, Jean Tirole, Apr 19, 2007
It is our pleasure to introduce this special issue of Competition Policy International, dedicated to the Two-Sided Markets Symposia organized in May 2006 at University College London and June 2006 at MIT in Cambridge, Massachusetts. The contributions presented in this volume are a good illustration of the incredible richness and depth of the challenges posed by multi-sided industries. Although some convergence can be acknowledged, there is still some debate among economists, lawyers, and regulators about several important issues. As a trivial illustration, several contributors to this special issue criticize the terminology itself: Evans and Schmalensee suggest that the denomination two-sided markets is misleading because the word market is not used in the antitrust sense and, of course, many platforms have more than two sides.
The multi-sided platforms (or MSPs) nomenclature they and others propose is likely to become the new standard. The contributions presented in this symposium show that the paradigm of MSPs is applicable to a growing number of industries. A first reason is that new (multi-sided) business models sometimes become successful in formerly one-sided industries. Professor Andrei Hagiu of Harvard Business School has pointed out that Japanese convenience store Lawson and the railway commuter card Suica entered new markets by going from one-sided to two-sided businesses. A second reason is that many existing two-sided platforms are expanding into other two-sided industries. For example, latest generation videogame consoles (e.g., PS2, Xbox, GameCube) offer DVD playing, Internet browsing, and computer capabilities. They have been termed the Trojan horses of the digital homes. Similarly, Brito and Pereira analyze how the development of mobile virtual network operators is bound to reduce considerably the costs of entry in the mobile telephone industry.