Antitrust Concerns in Digital Markets

VIDEO & AUDIO RECORDING

event materials

Presentation by Justus Haucap
Presentation by Oliver Latham

summary

There exist multiple opinions on how markets should be regulated to allow for a magical force of competition. The issue is particularly urgent with the emergence of digital economy. Indisputable, the Internet tends to foster competition in markets. However, the rising number of concerns is closely related to a myriad of antitrust issues in digital economy. The discussion was not only about what are those concerns, but also about the role of regulators and competition authorities in finding appropriate solutions to particular cases, on each consensus has not been reached. Practices of different competition authorities also differ between the countries: some are timid, some are striker than others in applying particular competition rules. What should legislator do through his regulatory arm?

Among many concerns brought by the development of technology and the emergence of digital economy, vertical restraints in e-commerce, optimal use of big data, consumer privacy, selective distribution agreements in relation to luxury products and fake news as an antitrust problem are mentioned quite often. There is a tradeoff between potential benefits of online platforms, e.g. in terms of innovation and the worry about the existence of barriers to entry at the same time. When one deals with some of the issues of the digital markets, the critical question is where do we draw a line.

Overall, while there is a huge amount of issues in the digital markets, online platforms do great things, facilitating the exchange of information and competition. Data sources can be an essential facility, but how data can be shared, should a privacy play a role in merger control, the definition of markets where people do not use money for transactions are all open questions. Big data is already having profound influence on content producers. But data is not a barrier to entry, it is rather a more complex mechanism where platforms take actions to reduce traffic or access. One more issue is that platforms have an incentive to vertically integrate. Vertical integration can facilitate the construction of asset which is hard to replicate and it can lead to the situation when the provision of the services is done by not the most optimal supplier, but by the one, which is vertically integrated. In this case, we might have an incentive to change the policy towards vertical integration, but no tools exist to prohibit vertical integration. Therefore, one of the proposed solutions is to ensure that vertically integrated players have limited tools to promote their own firm through regulation of neutrality.

Event notes by Yana Myachenkova, Research Assistant.