Self Preferencing and Price Squeeze. Authors: Martin Mandorff and Sten Nyberg

Digital markets are playing an ever greater role in the life of consumers, and economic forces propel these markets to be dominated by a handful of firms. There is concerns about how these firms can control market access and, in extension, how they may exercise control to exclude their competitors by offering their own products in competition with those of commercial users on the platform, self-preference and through pricing squeeze.

In this paper the authors examine the incentives for a dominant firm, a gatekeeper, controlling a competitive bottle neck, whether it be a digital platform, supermarket shelf space, or a classical infrastructure such as a telecommunications network, to exploit or exclude competitors by means of selfpreferencing. Such self-preferencing can take the form of either price or non-price behaviour on the part of the gatekeeper. The paper focus mainly on pricing practices, in the form of price squeeze, but also other forms of self-preferencing.

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