The problem is that network effects just aren’t as durable as they used to be...Currently, modern technology — fueled by software, the internet, and the cloud — makes it possible for a challenger to enter the market at minimal cost. Price competition doesn’t matter much since the winner that took…
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David S. Evans
David Sparks Evans (born 1954) is the chairman of the Global Economics Group in the firm’s Boston office, and has broad experience in the economics of antitrust, intellectual property, and financial regulation. Evans has an international practice and has worked on matters in the United States, the European Union, China, Brazil, Australia, and other jurisdictions. He has provided economic advice on a wide range of industries but has special expertise in financial services, internet-based, media, and information-technology based businesses. He is one of the world’s leading authorities on platform-based (“two-sided market”) businesses. 2Antitrust and intellectual property Evans has worked on mergers, monopolization, abuse of dominance, and joint venture cases in multiple jurisdictions. A number of his matters have involved the intersection of antitrust and intellectual property and the antitrust of information technology/on-line businesses. His representative matters have included: Monster’s acquisition of Yahoo! HotJobs merger before the Federal Trade Commission WPP’s acquisition of Taylor Nelson Sofres before the European Commission Google’s acquisition of DoubleClick for various third-party intervenors before the Federal Trade Commission, European Commission and Australian Competition and Consumer Commission Investigation of VisaNet and Redecard by the Central Bank of Brazil and other regulatory authorities concerning certain exclusivity agreements and practices in the payment card industry. In Twombly v. Bell Atlantic, Evans was chief author of amicus brief by economists submitted to the U.S. Supreme Court in support of cer
Experience also shows us that that network effects can also work in reverse, and destroy value with explosive speed. This has happened to many shopping malls. When consumer traffic drops a little, a few stores leave, the mall becomes less attractive. Then traffic reduces a little more, more stores…
But the new economics of multisided platforms, which we explore in detail in Matchmakers, shows that the winner-takes-all theory doesn’t describe most internet platforms. What markets have these companies actually won? If you think Google is the winner in search, Facebook in social networks, and…