Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Thursday, October 22, 2020

The Economics of Online Ad-Supported Services

The Economics of Online Ad-Supported Services

Gregory K. Leonard



The Internet did not create the ad-supported business model. However, a larger variety of ad-supported services have arisen and flourished online because the Internet’s functional and economic characteristics have made the ad-supported business model attractive in many online contexts. The existence of such services has provided substantial benefits for both users and advertisers. Government antitrust authorities should resist any temptation to modify antitrust policy toward online ad-supported services, as doing so would put these benefits at risk. There is nothing unique or special about online ad-supported services that would justify treating them differently than other types of businesses. Conduct in this context should be assessed by its effects on consumer welfare, and the same economic techniques used in other contexts are readily applicable to online ad-supported services.

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