An Economic Analysis of the Self-Preferencing Debate

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With the growth of digital platforms, regulators and government officials in the US and abroad have become increasingly concerned that certain platforms favor their own products over competitors’ on their platforms. Such “self-preferencing” practices may violate antitrust laws or regulations and regulators have launched investigations into some of these practices. In this article, two Analysis Group consultants and one academic affiliate provide an economic analysis of the self-preferencing debate. They begin by surveying some of the most common at-issue practices and some of the proposed regulations intended to address them. The authors then take a historical view, examining why such practices have come under increased scrutiny in the digital age when the same practices have not raised similar concerns previously. Finally, the authors review recent economic research on the effect of self-preferencing practices and proposed regulatory responses on consumer welfare to shed light on the possible effects of regulating these practices.