Complex Antitrust Harm in Platform Markets

Should the FTC have allowed Zillow to acquire its foremost rival, Trulia? It is increasingly well-accepted that digital platforms tend toward dominance in their immediately adjacent relevant-product markets. Google, for example, has long held a majority share of the markets for general-search results and advertising, prompting antitrust and competition-law scrutiny of its conduct.But some digital platforms also possess the ability and incentive to increase concentration in seemingly removed, though related, markets. Complex platforms can harness the power of reputational mechanisms to steer their users toward favored third-party suppliers. A search engine, for example, might (under certain conditions identified by this article) rationally steer its users toward particular sellers of real-world products like restaurant meals, home goods, etc. This type of steering forecloses competition in markets not immediately adjacent to the platform itself. Current antitrust analyses focus solely on harm in "relevant markets," overlooking potential harm in "related markets." The Zillow-Trulia merger illustrates how related-market harm might occur. Post-deal statements by company executives indicate that the FTC's clearance of the merger may have constituted a false negative, and that the merged firm may be increasing concentration in local real-estate agent markets. Related-market harm is inefficient and reduces consumer welfare. This article contends that future merger and conduct analyses should take seriously the possibility of such harm