Glossary of Platform Law and Policy Terms

Self-preferencing

Cite this article as:
Konstantinos Stylianou (17/12/2021). Self-preferencing. In Belli, L.; Zingales, N. & Curzi, Y. (Eds.), Glossary of Platform Law and Policy Terms (online). FGV Direito Rio. https://platformglossary.info/self-preferencing/.

Author: Konstantinos Stylianou

‘Self-preferencing’ is the practice of giving preferential treatment to one’s own complementary products or services when they are in competition with products and services provided by other entities using the platform (Crémer, 2019)1. The term rose to prominence after the Google Shopping case (2017)2 where the European Commission accused Google of ‘self-preferencing’ its own shopping results over those of other competing shopping comparison services. However, self-preferencing is thought to encompass various practices, many of which are not new, such as refusal to deal or tying.

The central concern around self-preferencing is that a dominant platform will leverage its power in the platform market either to expand its power in neighboring markets or to protect its dominant position in the home platform market (Graef, 2019)3. The former is more common when the platform is vertically integrated and wants to establish itself or protect its position in the neighboring market, whereas the latter consideration occurs when the platform wants to protect itself from competitive entry or expansion in the home market.

Self-preferencing can manifest itself in different ways, some well-known and some newer and less well-understood. Among the traditional practices that can result in non-affiliated products and services being in a disadvantageous position compared to the platform’s own products or services (or those affiliated with it) are refusal to supply, tying, abusive discrimination, and margin squeeze (Ahlborn 2020)4. For these practices there are well-developed legal standards.

Newer practices have included the manipulation of the ranking of affiliated products and services compared to those of non-affiliated competitors, and the use of data from competitors who rely on the platform to improve the platform’s own products and services. The proper tests for when such practices should be considered problematic have yet to be developed. Among the relevant parameters that can be considered are whether the platform is indispensable to the non-affiliated products and services, whether the platform is dominant, the rationale and design of the self-preferencing, the extent of the negative effects of the self-preferencing, and whether it has any pro-competitive justifications (Ahlborn, 20205; Zingales, 20186).

References

  1. Report for the European Commission. 
  2. Google, Case AT.39740. (2017). Google Search (Shopping).
  3. Graef, Inge. (2019) Differentiated Treatment in Platform-to-Business Relations: EU Competition Law and Economic Dependence. Yearbook of European Law. 38, 448-499.Zingales, Nicolo. (2018). Google Shopping: Beware of ‘Self-favoring’ in a World of Algorithmic Nudging. CPI Europe.
  4. Ahlborn, Christian. Leslie, Will. O’Reilly, Eoin. (2020). Self-Preferencing: Between a Rock and a Hard Place. CPI Antitrust Chronicle.
  5. Ahlborn, Christian. Leslie, Will. O’Reilly, Eoin. (2020). Self-Preferencing: Between a Rock and a Hard Place. CPI Antitrust Chronicle.
  6. Zingales, Nicolo. (2018). Google Shopping: Beware of ‘Self-favoring’ in a World of Algorithmic Nudging. CPI Europe
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By Konstantinos Stylianou

Konstantinos Stylianou is an Associate Professor in Competition Law and Regulation at the University of Leeds. His areas of focus are the law and policy of digital markets, antitrust, and blockchain. He has worked on projects funded by the EU, Swedish Competition Authority, Google, Facebook, and Thailand’s National Broadcasting and Telecommunications Commission among others, and he has been involved with the Hellenic Competition Commission and the Greek Government on the reform of competition law in Greece. He holds an S.J.D. from the University of Pennsylvania, where he studied as an Onassis Scholar, an LL.M. from Harvard University, where he studied as a Fulbright Scholar, and an LL.M. and LL.B. from Aristotle University.

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