australia
Business behaviour that is potentially illegal
There are also a range of business behaviours that may damage competition, depending on the circumstances.
Business behaviour can break the law when it has the purpose, effect or likely effect of substantially lessening competition in a market.
Business behaviour substantially lessens competition when it interferes with or damages the competitive process in a market in a meaningful way. This is usually by deterring, hindering or preventing competition.
The first point of analysis is to determine what the market is. If this went to court, Reddit would try to define the market as widely as possible - say “all mobile apps”, in that market, whatever Reddit does is going to have an insignificant effect because they are such a small player. In contrast, the plaintiff would try to define the market as narrowly as possible - only apps that use Reddit data, and therefore Reddit has substantial market power.
The judge would decide what the market is, probably somewhere between the two extreme positions, and that decision will be critical in determining if Reddit has substantial market power in it. If they don’t that’s the end of the case because you can’t abuse a power you don’t have.
If they are found to have substantial market power, then the next question is whether Reddit’s pricing is a misuse of that power. The issue here is margin or price squeezing by unfairly raising the cost of an essential input. They key here is in determining what a fair price for API access is - Reddit is entitled to charge for access o their data but they are not entitled to charge a price that is excessive. I don’t know enough about commercial API pricing to venture a guess is $12,000/50 million requests is reasonable.
While this analysis relies on Australian law, the general thrust of ant-completion law is pretty universal.
