The Antitrust Analysis of Rules and Standards for Software Platforms

By David S. Evans on February 3, 2015

By David. S. Evans, and published January, 2015

Abstract

Software platforms anchor vast global communities of users, application developers, device
manufacturers, content providers, advertisers, and others. They drive innovation by enabling
entrepreneurs, often anywhere in the world, to develop applications and to reach all the users of the
platform, often anywhere in the world. These applications are sometimes the foundation of substantial
businesses.

The value of these software platforms, and their ability to support large communities, depend
on the ability of the platform to promote positive externalities and reduce negative externalities. Software
platforms usually impose rules and standards and often exclude participants that harm others in the
community, and reward participants that benefit others in the community. Competition policy should
presume that these governance systems, and the restrictions they place on platform participants”including
their possible expulsion from the platform”are efficient and pro-competitive.

Software platforms could,
however, employ governance systems to foreclose competition. These restrictions, therefore, should not be
lawful per se. Rather, courts and competition authorities should employ screens to protect pro-competitive
restrictions and isolate anticompetitive ones. The application of these screens should be neutral to the
licensing model chosen by the software platform creator. There is, in particular, no basis for imposing
limitations that are, in effect, tougher on software platforms that use an open-source license model than on
software platforms that use a proprietary license.

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About the Author

Name
David S. Evans
Title/Location
Chairman, Boston
Phone
(617) 320-8933
Expertise
Antitrust/Competition Policy; Labor and Discrimination; Financial Regulation