Given recent developments in the digital space, one could be forgiven to think that regulators have embarked on an extensive exercise of platform design targeting the largest players in online services. Regulatory provisions in the EU and many of the remedial actions from competition investigations are limiting the ability of large platforms to operate as...Read More
The ‘open early, closed late’ strategy is taking a heavy toll on consumers in the digital economy. The pure case of ‘open early, closed late’ occurs when a digital platform imposes prices after a period of free and unlimited supply. More generally, ‘open early, closed late’ encompasses broader forms of consumer exploitation, like when Netflix,...Read More
This brief contribution will focus on three aspects of the topic we are supposed to address. Firstly, I’ll try to provide a tentative definition of dynamic industries/markets, identifying their main characteristics. Secondly, I’ll emphasize the main challenges raised by dynamic industries for market definition and, hence, for the assessment of market power. Finally, I’ll provide...Read More
Examining regulatory responses to technological advancements reveals a recurring pattern. Technological innovation often paves the way for widespread commercialization and adoption. Yet, in some instances, the large-scale implementation of a technology unveils unforeseen drawbacks that cannot be predicted or thoroughly tested in controlled lab environments. As time progresses, the negative effects of these technologies become...Read More
This session is about ecosystems and managers. One can interpret that in many ways. I want to interpret it in a way that is not perhaps what the organizers had in mind: I want to argue that ecosystems and managers are substitutes for one another. All too often, we tend to think of dynamic competition...Read More
Over the last couple of years, a “new conventional wisdom” (Shapiro, 2018) has emerged: there is evidence of a widespread increase in market concentration in both the U.S. and the EU economies over the last few decades. Because higher level of market concentration may reflect greater firm market power, this has fuelled concern that competition...Read More
Sometimes, to understand where we are, we must first understand where we came from. The Digital Markets Act (“DMA”) is the outcome of a long reflection process that was informed by the Commission’s own antitrust enforcement experience, as well as by the realisation that some issues related to features of the digital economy were of...Read More
The Digital Markets Act (DMA) represents a new institutional framework redefining the principles of what constitutes anticompetitive behaviour and abuse of advantageous position in the digital economy, and perhaps more importantly, the domain within which such conduct is assessed. It imposes a list of obligations on firms operating large digital platforms, the so-called “gatekeepers,” to...Read More
The current digital transformation can be understood as a Schumpeterian revolution of the entire economy and society through an ongoing process of innovation and technological change as the most important driver of economic development. Schumpeter emphasized the importance of entrepreneurs, the creation of new products, new production technologies, and new business models (as forms of...Read More
In this note, which partly draws on discussions and papers presented at the inaugural DCI conference, we argue that merger policy in the tech sector must be based on solid empirical evidence. We further argue that merger policy should not only consider post-merger effects on innovation, but also its ex-ante impact on pre-merger innovation. While...Read More
Start-up acquisitions by larger technology firms, including by “big techs” such as Google, Amazon, Apple, Facebook, and Microsoft, were long regarded as an integral part of innovation in fast-paced, high-technology sectors. For entrepreneurs and venture capital investors, a sale to big tech companies offered an attractive option to realize the value of accumulated intangible capital...Read More
There are some frequently mentioned statistics about the number of acquisitions carried out by the large digital platforms and, in particular, about the lack of merger control intervention. For instance, the Furman report cited the statistic of more than 400 acquisitions undertaken by Google, Apple, Facebook, Amazon and Microsoft between 2008 and 2018 and not...Read More
Concerns around dynamic competition are increasingly featuring in merger control, particularly in the UK. Such concerns have been an important factor in the CMA’s decisions to prohibit the mergers between Microsoft and Activision and between Meta and Giphy. Other mergers that might have raised dynamic competition concerns have been abandoned by the parties, facing the...Read More
Dynamic competition is the new kid on the block. It seeks to redirect the focus of competition policy towards innovation, value creation and economic change. Dynamism is indeed at the heart of competition. What’s not to like? The intuitive appeal of dynamic competition is hard to contest. Yet its practical application poses a series of...Read More
Competition increases when rivalry incentivizes firms to adopt more “efficient “practices. However, performing a fixed set of activities more efficiently only facilitates “static” competition. Absent significant innovation, efficiency augmenting rivalry does not and cannot deliver significant welfare improvements. A more powerful force of economic growth and productivity comes from dynamic competition through innovation and entrepreneurial...Read More
