| After about twenty years of commercial development, the Internet industry has made considerable progress, and there are many outstanding Internet companies which have great influence in the whole world. In recent years, with the "Internet plus manufacturing" strategy has become the mainstream of the world economy, the Internet industry will enter a new stage of development, and will play a more important role in the world economic and social development. However, along with the growth of Internet industry, there are increasing cases of antitrust enforcement in the Internet industry in many countries of the world. In fact, from the very beginning of development in the Internet industry, Internet companies, especially those successful Internet firms, have been the focuses of national anti-monopoly review, and all the signs indicate that antitrust cases in the field of Internet industry will continue to increase.In view of the important status of Internet industry in the world economic and social development and the phenomenon of increasing occurrence of antitrust cases in the Internet industry, whether the anti-monopoly law can be effectively implemented in the Internet industry has become the focus of various sectors of the community. Correct anti-monopoly analysis is the premise of effective law enforcement. More fundamentally, the relevant market definition is the key step and logical starting point in antitrust analysis. Most trials must be analyzed and determined in condition of a correct definition of the relevant market, therefore, whether the law enforcement agencies can make reasonable relevant market definition becomes the key to whether they can effectively implement the anti-trust law in the industry.However, the special economic and technical characteristics of the Internet industry has brought great challenges to the relevant market definition analysis,especially the popular free business model in the Internet industry which based on two-sided market has made the traditional relevant market definition analysis tools which based on one-sided market logic and price theory inappropriate and not applicable. So far, this is still the crux of problem when most countries in the world dealing with relevant cases. The parties involved are not able to put forward convincing economic evidences in asserting their claim. Although many scholars have been aware of the importance of the problem and actively seek to improve the related market definition methods in the Internet industry, the theoretical field has not been able to form an authoritative and operable analysis frameworks and methods yet. If the problem can not be effectively solved, it is likely that the anti-trust law enforcement in the Internet industry is susceptible to higher risks of mistakes. This will not only hinder the healthy development of the dynamic Internet industry, but also bring enormous social costs.This paper is devoted to solving the problem of empirical analysis of Internet industry related market definition. On the basis of analysis of the two-sided market theory and the traditional relevant market definition methods, and the comprehensive analysis of the economic and technological characteristics of the Internet industry from the perspective of the anti-trust economics, I developed structural econometric model,and specified a Nested Logit model to represent the substitution pattern between focus products of anti-trust cases in Internet industry. After that, I constructed the demand elasticity expressions with the application of optimization conditions and Lerner index.Then I used this model to analyze the case of Qihoo 360 V. Tencent. With the Internet usage data from iResearch, I estimate own elasticity, cross elasticity and diversion rate of instant messaging products and micro-blog products. Using these key parameters,SSNIP and other analysis methods, the relevant market definition of the case was analyzed. I hope that the study provides a reference for the analysis frameworks in the challenge of the Internet industry relevant market definition through the combinational form of theoretical analysis and case analysis. The main research work and innovations of this dissertation are summarized as follows:(1) By reviewing the two-sided market theory and the conventional relative market definition methods, I clarified some important theoretical issues of the two-sided market theory and the relative market definition. In the process of reviewing the theory of two-sided markets, this paper gave clear and definite concept and characteristics of two-sided market, and came to the conclusion that two-sided market is not the inherent characteristics of any industry. Therefore, when it comes to the problem of relevant market definition, one should define whether the enterprises involved in the case belongs to two-sided market. Through the analysis of the difficulties in defining the relevant market, this study clarified that the key point of relevant market definition referring to two-sided market is to find the effective measure of the multiplier effect between the two-sided platforms. Through reviewing the traditional methods of relevant market definition system, the dissertation examined the historical evolution, the economic logic of relevant market definition theories, various methods to define relevant market, and their advantages and disadvantages respectively. These conclusions have pointed out the directions for the construction of the following theoretical model and some other related research.(2) Based on the perspective of anti-trust economics, the economic and technological characteristics of the Internet industry and its impact on market competition and competitive analysis are analyzed. This article summarized the key economic characteristics of the Internet industry, including strong network effects,competitive monopoly market structure, highly dynamic innovation and free business model based on the two-sided market, etc. Network effects and its mechanisms in the Internet industry may lead to some anti-competitive effects, so it should be carefully measured in the antitrust analysis. Competitive monopoly market structure is a unique characteristic of Internet industry, although it weakened the indicative function of market share to judge the market power, to what extend the potential competitive factors can hamper the market power of the monopoly enterprises still should be carefully weighed in the antitrust analysis. The characteristic of highly dynamic innovation enables Internet enterprises may suddenly gain and lose the dominant position in the market, but this is not enough to show that Internet industry can be exempted from antitrust scrutiny, but only that in antitrust analysis should analysis the relevant time market and pay attention to the long-term performance of the enterprises concerned.The characteristic free business model based on two-sided market makes the relevant market definition analysis referring to Internet companies face the biggest difficulty and challenge. The profitability of the free goods in Internet industry is the theoretical basis of why free goods need to accept antitrust review. Meanwhile, it is also a breakthrough to solve the problems of related market definition analysis generated by free goods.(3) By converting of the calculation conditions of Lerner index, this paper found the particular parameter which can both bypass the Internet product "zero price" trouble,and can effectively measure the mutual dependence between the two sides of the platform, thus it can provide a breakthrough for relevant market analysis of two-sided market and (or) free goods. Based on the recognize that free goods have implicit price,without imposing additional constraints, this paper transformed the calculation condition of Lerner index, and get that we can use the data of product's profit and income to calculate Lerner index, thus can avoid using the real product price information. While the profit and income indicators of free goods are the embodiment of the effect of the multiplier effect on both sides of the two-sided platform, so the Lerner index obtained by this way can not only bypass the problem of "zero price" of the free goods, but also effectively measure the interdependence between two sides of the platform. Thus it found a breakthrough to solve the long troubled antitrust analysis problems generated by free goods.(4) Taking the characteristic of free and two-sided business mode as the starting point, this paper constructed the demand elasticity expressions by using optimization conditions and Lerner index, and one can use it to calculate the demand substitution parameters, such as self-elasticity, cross-elasticity, and diversion ratio, etc. Through grasping the essential characteristics of the Internet industry profit model, this article establish the target profit function model of the enterprise with free goods, and then derived the calculation formulas of the product's demand substitution parameters by using the optimization condition of the target profit function, the Lerner index and Nested Logit model. In this paper, the rigorousness of the ratiocination of theoretical model can guarantee its scientificalness and reasonableness. The reservoirs of Internet industry data (including third party) can ensure the availability data required by the model. And the development of structural econometric technology makes the model has strong operability.(5) By making a completely relevant market definition analysis of the case of Qihoo 360 v. Tencent, this paper proved that the SSNIP test is universally applicable,and it also provide a reference for the complete analysis of ideas and frameworks for the Internet industry relevant market definition analysis. Using the case of Qihoo 360 v.Tencent as an example, combined with the theoretical model constructed in this paper,and using the Internet usage data of iResearch to make an empirical estimation, we estimate the own elasticity, cross elasticity and diversion rate of the focus products of this case (instant messaging products and micro-blog products). Using these parameters,we can directly use SSNIP test to empirical analyze the relevant market. It proofs that the SSNIP test can apply to any situation, including free and two-sided market circumstances.The main innovations of this dissertation are as follows:(1) Based on the fundamental understanding of the implicit price feature of free Internet product, the study find a way to obtain Lerner Index by means of mathematical transformation with the information of profit and income, which is a dependent method to measure the extent of user interdependence in and therefore crackles the "zero prices"problem of internet products and two-sided market.(2) With the key characteristics of free and two-sided market as the starting point, I construct demand substitution structure model which can estimate the focus products'demand substitution parameters, such as self-elasticity, cross-elasticity and diversion ratio with the relevant optimization conditions, Lerner index and Nestde Logit Model.(3) By making an empirical analysis of relevant market definition with a real anti-trust case,this paper proved that the SSNIP test is widely applicable in different cases. Even if the SSNIP can't be applied directly, one can adapt the SSNIP test to the specific situation by revising some key parameters to improve the estimation method.This finding offers inspiration for scholars in relevant market definition research. |
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