Trinko Meets Microsoft: Leverage and Foreclosure in Platform Refusals to Deal

Large platforms are often accused of refusing to serve (or discriminating against) competing sellers in adjacent product markets. Antitrust law labels such activity a unilateral “refusal to deal” (“RTD”) and evaluates it under a predation-like framework shaped by the two leading RTD cases, Aspen and Trinko. However, this framework is largely unhelpful in evaluating platform RTDs, because it does not ask the right economic questions. The relevant economic risk raised by platform RTDs is typically that the defendant might be leveraging its control of a dominant platform to foreclose rivals in an adjacent market. Therefore, as an economic matter, they tend to have much more in common with tying cases like Microsoft than they do with historical RTD cases like Aspen or Trinko. This suggests that courts ought to revise the legal standard used to evaluate platform RTDs to better capture economic realities. This would allow for meaningful antitrust oversight of platform conduct without opening the door to the freeriding or administrative concerns often associated with RTD doctrine. It would also likely end the Congressional push for an ill-conceived “self-preferencing” bill that might well do more harm than good.  

By Erik Hovenkamp^[1]

I. INTRODUCTION

Can a powerful firm really violate the antitrust laws by merely refusing to do business with a competitor? Officially, the answer has been yes for more than a centu