The Move to Smart Mobile and its Implications for Antitrust Analysis of Online Markets

Posted by Social Science Research Network

The Move to Smart Mobile and its Implications for Antitrust Analysis of Online Markets

Hemant K. Bhargava (University of California), David S. Evans (Global Economics Group) & Deepa Mani (Indian School of Business)

Abstract:     Online markets have changed as a result of people shifting massively from using personal computers and browsers to using technologically powerful mobile devices and apps. These changes cover leading online players, consumer behavior, and products. The use of smartphones and mobile apps, and the speed of change, vary between countries and in particular between countries based on their stage of development. Mobile app use is lower in fast-growing countries, such as India, than in developed ones, such as the United States. However, as smart mobile phones with mobile broadband connections become ubiquitous among consumers in developing countries, mobile app use in these countries is likely to leapfrog the use of personal computers and browsers. As a result of the movement to smart mobile, the analysis of markets that might have made sense several years ago, does not today, and will make even less sense several years hence. The widespread adoption of smart mobile has caused, and continues to result in, significant market disruption, including for incumbent Internet-based companies, which are themselves young compared to the traditional companies they disrupted. These dramatic and unpredictable changes pose several issues for antitrust. They show that antitrust analysis that focuses on static markets is highly prone to error when it comes to dynamic online industries, that authorities risk making assumptions during investigations that are disproven by the markets soon after they have brought charges or decided a case, and antitrust remedies are prone to be ineffective or harmful because they are developed for markets during the investigation but are radically different by the time the remedies are implemented.