Monopolies On Social Network Services (Sns) Markets And Competition Law

Abstract

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