Abstract
Since the establishment of commercial sharing economy services like Uber, Blablacar, Lyft, Airbnb, TaskRabbit, etc., the debate about the sharing economy and its effects on competition has generated lively discussions, which have too often dangerously departed from a debate based on objective (market) observation to evolve into a quarrel among the supporters and opponents of the online platforms. Undoubtedly, the peculiar features of these new firms' business models create frictions with the traditional regulatory environment, which currently appears to be incapable of framing them into models and schemes typical of a previous economic phase, such as, for example, one-sided markets, no externalities, and competition mainly on price. Nevertheless, setting aside the more or less impromptu debate about the social goodness of these firms, we argue that competition enforcers should look at their effective market power. In fact, as the basic principles of competition law teach us, only when those firms have (more or less legitimate) significant market power, will they be subject to special responsibilities and to stringent restrictions and obligations. Toward this aim, it is first necessary to define the relevant market. And, immediately afterwards, to delimit firms' market position. This, in turn, should help to assess their compliance with the competition rules and the obligations that they are – or rather that they should be – subjected to. This exercise is not an easy one because the traditional regulatory concepts and definitions do not seem to reflect the competition dynamics that characterise the new markets on which we are reflecting. In this paper we focus on a number of challenges that are posed by the sharing economy businesses, suggesting that they could be solved with the traditional competition instruments, although adapted to the peculiar features of the markets that are at stake. These include, among others, multi-sidedness and the presence of different externalities.
Highlights
Since the establishment of commercial sharing economy services like Uber, Blablacar, Lyft, Airbnb, TaskRabbit, etc., the debate about the sharing economy and its effects on competition has generated lively discussions, which have too often dangerously departed from a debate based on objective observation to evolve into a quarrel among the supporters and opponents of the online platforms
The effects of the sharing economy on competition continue to trigger an intense debate, which has too often departed from concrete market observations to evolve into a quarrel among the supporters and opponents of some of the online platforms, which each of us will have come across
As for the enforcement side, good examples of the attention dedicated to innovation and incentives to innovate in the framework of a competition analysis are the following: Microsoft (COMP/C-3.37.792) Intel/McAfee (COMP/M.5984), and the current Google case, i.e. Google Search (COMP/AT.39740); Google Android (AT.40099) and Google Search Adsense (COMP/AT.40411). if we look at the sharing economy businesses, we notice that the acquisition of market power, and, in parallel, the establishment of a wide community of users, largely depend on the innovative nature of the service/product offered
Summary
The effects of the sharing economy on competition continue to trigger an intense debate, which has too often departed from concrete market observations to evolve into a quarrel among the supporters and opponents of some of the online platforms, which each of us will have come across. The features of many of the sharing economy firms’ business models create frictions with the traditional regulatory environment, which often appears to be not properly equipped to frame them within models and schemes typical of a previous economic phase This is true from a competition perspective, and from, by way of example, labour law and the sectorial regulation perspectives. The European Commission defines the collaborative economy as being “a complex ecosystem of on-demand services and temporary use of assets based on exchanges via online platforms” (Upgrading the single market, Communication of October 2015) Both of these definitions attribute a key role to online platforms, which are the most typical example of firms adopting a two-sided business model. It remains true that to properly assess market power in online platforms, as in any other sector, it is first necessary to perform an exercise, which may appear to be extremely obvious and predictable, notwithstanding the fact that only a few have carefully done it so far: to properly define the relevant market, and, immediately afterwards, to identify the actual or potential competitors of the relevant firms, to delimit the latter’s market position and to be able eventually to assess their compliance with the competition rules and the obligations to which they are – or rather should be – subjected
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