Understanding competition in digital markets: new perspectives on old practices

Abstract

Around the world, competition agencies and academics alike have raised concerns that the existing suite of policy tools and economic theory fail to capture all of the harms that can arise in digital markets. At the same time, other academics and practitioners consider that competition policy and industrial organization is unable to account for many of the benefits that online platforms and digital ecosystems can bring. As a range of new interventions – ranging from strengthened ex-post enforcement tools to new ex-ante regulations – are being proposed, we ask which view is right? Are the business practices observed in digital markets and targeted by these reforms so obviously harmful that they are deserving of a return to form-based prohibitions in place of effects-based analysis? Or does this represent an unhelpful regression, based on a misunderstanding of how these new types of markets function?