David S Evans – författare

The definitive account of the trillion-dollar payment card industry.

The payment card business has evolved from its inception in the 1950s as a way to handle payment for expense-account lunches (the Diners Club card) into today''s complex, sprawling industry that drives trillions of dollars in transaction volume each year. Paying with Plastic is the definitive source on an industry that has revolutionized the way we borrow and spend. More than a history book, Paying with Plastic delivers an entertaining discussion of the impact of an industry that epitomizes the notion of two-sided markets: those in which two or more customer groups receive value only if all sides are actively engaged. New to this second edition, the two-sided market discussion provides useful insight into the implications of these market dynamics for cardholder rewards, merchant interchange fees, and card acceptance. The authors, both of whom have researched the industry for more than 25 years, also examine the implications of the recent antitrust cases on the industry as well as other business and technological changes—including the massive consolidation brought about by bank mergers, the rise of the debit card, and the emergence of e-commerce—that could alter the payment card industry dramatically in the years to come.

Software platforms are the invisible engines that have created, touched, or transformed nearly every major industry for the past quarter century. They power everything from mobile phones and automobile navigation systems to search engines and web portals. They have been the source of enormous value to consumers and helped some entrepreneurs build great fortunes. And they are likely to drive change that will dwarf the business and technology revolution we have seen to this point. Invisible Engines examines the business dynamics and strategies used by firms that recognize the transformative power unleashed by this new revolution—a revolution that will change both new and old industries.

The authors argue that in order to understand the successes of software platforms, we must first understand their role as a technological meeting ground where application developers and end users converge. Apple, Microsoft, and Google, for example, charge developers little or nothing for using their platforms and make most of their money from end users; Sony PlayStation and other game consoles, by contrast, subsidize users and make more money from developers, who pay royalties for access to the code they need to write games. More applications attract more users, and more users attract more applications. And more applications and more users lead to more profits.

Invisible Engines explores this story through the lens of the companies that have mastered this platform-balancing act. It offers detailed studies of the personal computer, video game console, personal digital assistant, smart mobile phone, and digital media software platform industries, focusing on the business decisions made by industry players to drive profits and stay a step ahead of the competition. Shorter discussions of Internet-based software platforms provide an important glimpse into a future in which the way we buy, pay, watch, listen, learn, and communicate will change forever. An electronic version of this book is available under a Creative Commons license.

A different kind of matchmaker.

This book explores the implications of the U.S. Supreme Court’s ruling in Ohio et al. v. American Express, and the preceding litigation, for the treatment of multisided platforms under U.S. antitrust law. It is based on a series of articles that the authors wrote (either jointly or individually), leading up to and in the aftermath of the Supreme Court’s decision.

The authors consider that the Supreme Court ruling provides valuable guidance for antitrust analysis in such markets. This book emphasizes the importance for enforcers and the judiciary to take full account of the multisided nature of certain markets, not only in payment services, but throughout the economy (including other types of multisided platforms, which are particularly common in online digital markets).

Although Evans and Schmalensee agree with the Supreme Court’s reasoning, this book nonetheless sets out criticisms of the Supreme Court’s ruling. The authors address such criticisms, based on our (and other legal and economic practitioners’ and academics’) understanding of the modern economic theories on multisided markets. In particular, Schmalensee underline the need for decisionmakers to take into account any alleged anticompetitive harm and benefits to participants on both sides of a multisided platform, before coming to any conclusion that there has been antitrust injury as a result of any given conduct.

Of particular importance, and emphasized throughout this book, is the need to undertake a full rule of reason analysis of conduct in multisided markets, consistent with both long-standing antitrust precedent and modern economic theory. A proper assessment must take into account the multisided nature of certain markets in all steps of antitrust analysis, whether the issue at hand relates to alleged monopolization, coordinated behavior, or a merger. Given the prevalence of multisided platforms, similar allegations of antitrust harm are sure to arise time and again in the years to come, and there are many unanswered questions. 

For convenience, as Appendices, the books also includes the text of the U.S. Supreme Court’s ruling, an amicus brief filed jointly by 28 antitrust professors, an amicus brief filed jointly by 8 economists, and the brief filed by the U.S. on behalf of the petitioners.

The pieces in this volume draw on the lessons of the past to set out how competition rules might deal with this new set of concerns, in various jurisdictions around the world. Each one draws on general themes, yet nevertheless addresses specific aspects of the contemporary debate. Much of today''s antitrust discussion concerns the businesses run by large companies such as Amazon, Apple, Facebook, Google, and Microsoft. Each has significant share in a given industry, and derives its revenues from what are described as "platforms." But how are such platforms different from the incumbent businesses of the past? The answer to this is not clear. Yet queries surrounding the platforms'' alleged dominance, and whether their conduct amounts to an infringement of competition rules, have been a source of controversy for over a decade. The pieces in this volume address this dilemma head-on.  At a fundamental level, there is the definitional threshold of what a "platform" even is, and what rules should apply to such a business. Then there is the question of whether "platforms" have a "special responsibility" towards downstream operators that rely on them to reach customers. In other words, can platform operators favor their own businesses in those related markets? Or do competition laws require them to treat all firms in the same way? What are the risks to competition if platforms are given free rein? In antitrust parlance, these questions are assessed under the rubric of "self-preferencing," which has dominated recent headlines.