Competition Law Enforcement and Regulation for Digital Platforms and Ecosystems: Understanding the Issues, Facing the Challenges and Moving Forward

Abstract

Competition authorities are under severe political pressure to intervene quickly against the digital behemoth for a variety of reasons. Various expert reports have suggested that traditional antitrust or competition law enforcement and merger control are inadequate or insufficient to deal with competition issues in the digital sector. This paper explores the competition issues raised by digital platforms and ecosystems, the extent to which these issues can be dealt with by competition law and whether regulation could be a complement or a substitute to competition law enforcement. The paper is divided into three sections. In the first section we look at the economics of digital platforms and ecosystems and their business models. In the second part, we analyze the main challenges faced by competition authorities when they apply their traditional analytical tools to antitrust or merger control cases in the digital sector. The third part compares the EU Digital Market Act proposal to regulate Gatekeeper platforms and the UK proposal to establish an enforceable code of conduct to govern the behaviour of platforms funded by digital advertising that are designated as having strategic market status (SMS). We conclude with a research agenda to help competition authorities avoid the risks of inadvertently giving in to the political pressure of economic populism or ideology or issuing misguided decisions which may be ineffective or, even worse, restrict competition or innovation in the digital sector.