Digital Platforms and the Transactions Cost Approach to Competition Law

In recent years, several competition authorities around the world have announced majorinvestigations into potential anti-competitive behaviour by digital platforms. Not all ofthat behaviour harms downstream consumers. This has contributed to a growing ‘existentialcrisis’ at the foundation of competition law: What is the harm that competitionlaw is designed to address? How, exactly, does competition law promote economic welfare?Separately, the literature on ecosystems emphasises the central role of non-genericcomplementary investments as a defining feature of ecosystems, and the power this cangive to ecosystem orchestrators over their associated complementors. We draw thesestrands together to show how a recently-proposed economic foundation for competitionlaw, drawing on the transactions cost literature, provides a consistent, compelling, andeconomically-sound foundation for competition policy towards digital platforms goingforward