David S. Evans (Market Platform Dynamics), The Economic Analysis of Exclusive Contracts in Two-Sided Markets: Federal Trade Commission vs. Surescripts, Revue Concurrences (2024):
Over the last 15 years in the United States electronic networks have almost entirely displaced fax, phone, and paper for transmitting prescription information between doctors and pharmacies and for transmitting insurance information between pharmacy benefits managers and doctors. In 2019 the U.S. Federal Trade Commission sued Surescripts alleging the company has had monopolies over these networks and, beginning in 2010, had maintained those monopolies through loyalty pricing and other actual or de facto exclusive contracts. In 2023, the FTC secured a permanent injunction of the loyalty pricing contracts and of contracts that would have similar effects. The FTC and Surescripts agreed that the networks were two-sided transaction platforms as defined by the Supreme Court in American Express. The economic analysis of the exclusive contracts illustrates the role of indirect network effects, critical mass, and multihoming in examining dynamic competition in platform markets. This paper provides a primer on those concepts and how they were applied to health tech markets in the Surescripts case. This discussion may be relevant for analyzing antitrust cases involving two-sided transaction platforms with exclusive contracts in other markets with strong indirect network effects.