No Strings Attached? Zero-Price Practices on Social Media Markets under EU Abuse of Dominance Assessment

Abstract

Do customers pay too little when they pay nothing for accessing a social media platform “for free”, and/or do they pay too much? These “free” online services attract customers even if they come at personal information or attention costs. As competition law traditionally focuses on positive prices, “free” services raise the question whether and how they could be assessed as potentially harmful to competition and consumers. Thus, the aim of this paper is to discuss the extent to which EU competition law can be applied to evaluate unilateral abusive pricing practices of social media platforms providing “free” services to customers. It explores the economic characteristics and competitive dynamics of social media platforms, contrasts the traditional framework for assessment of abuse of dominance, predatory pricing, and excessive pricing with the challenges posed by their “free” services, as well as offers recommendations.

Keywords: zero-price markets, free, social media, online platforms, abuse of dominance, predatory pricing, excessive pricing

JEL Classification: K21