Self-Preferencing: An Economic Literature-Based Assessment Advocating a Case-by-Case Approach and Compliance Requirements

Self-preferencing is widely perceived as a threat to competition. Within the European Union, it has led to prohibition decisions, such as the Google Shopping case in 2017, commitment-based decisions, such as the Amazon case in 2022, and regulatory initiatives, notably the Digital Markets Act (DMA). Self-preferencing can be understood as a form of discrimination and manifests in two primary ways. First, a dual-role platform may prioritize its own services, potentially foreclosing rivals or entrenching its dominance. Second, a non-vertically integrated platform may favor a specific downstream player to maximize fee-based revenues, thereby distorting competition. This contribution emphasizes four key points. First, economic literature suggests that the competitive impact of self-preferencing is highly context-dependent. Second, a case-by-case approach is crucial for effective competition law enforcement. Third, shifting the burden of proof onto the accused firm could enhance enforcement efficiency. Fourth, outright prohibiting platforms from operating as dual-role entities may generate excessive welfare costs; instead, compliance obligations – such as transparent access rules – could mitigate litigation risks while preserving competitive dynamics.