Content area
Full Text
This contribution to Communications & Strategies discusses the findings of a study commissioned by the European Parliament: The ECON annual competition study on "Challenges for Competition Policy in a Digitalised Economy" (VAN GORP & BATURA, 2015). The study was managed by Ecorys Nederland in cooperation with e-Conomics and supported by a team of academics and professionals 1.
The study describes the challenges that competition policy faces in relation to the digital economy. It explores the specific characteristics of digital economy markets and how these characteristics impact competition policy. The study is the result of an extensive literature review (including fourteen legal cases involving digital companies) and an intensive three-day workshop with twelve academics. The focus of the study is on the economic and legal analysis of competition problems that are caused by the characteristics of the digitalised economy. As such, competition policy and its instruments (such as anti-trust laws, merger regulation, State aid, and sector regulation) are at the centre of the study.
In this contribution we present an overview of the main findings of the study. We discuss the study's description of the digital economy, including a typology of business models and how these compete with each other. Moreover, we discuss the role of competition policy in the digital economy: what policy challenges are most prominently related to the digital economy? What is the role of competition policy with regards to these challenges? And, most notably, what challenges does the digital economy impose on competition authorities when enforcing competition law?
The digital economy
The study for the European Parliament presents the digital economy as being unique in a number of ways. The digital economy is presented as a complex structure of platforms stacked on each other, resulting in "wormholes" that allow the end-user to seamlessly move from one environment/platform into the other and allow content and service providers to choose among multiple routes to reach end-users. In this setting it is difficult to exclude competitors. At the same time, digital markets have a tendency to tip into a winner-takes-all outcome due to network effects. But the positions of the "winners" are contested and they need to constantly innovate as they are challenged by disruptive innovators that regularly change the boundaries of the market. The...