Competition law in the digital age: New antitrust standards or more regulation? Blockchain a solution from markets and for markets

Digitalisation has recently grown in importance in the competition policy debate. This reflects the rising relevance that digital firms have been acquiring in the global scene. In 2019, seven out of ten of the world largest companies by market capitalisation were tech corporations. Digital markets are also drawing the attention of competition authorities (CAs) because, due to their specific features, they become increasingly more concentrated. In 2018, the OECD registered several broad economic trends that raised concern, including the following: (i) firm entry rates have fallen, particularly in digital-intensive sectors; (ii) mark-ups have increased; (iii) M&A activities targeting digital firms have accelerated; all that leading to (iv) growing concentration of revenues. Thanks to the role played by network effects, economies of scale and scope, big-data, switching costs, intellectual property rights, and consumers’ inertia and inelasticity of ‘process innovation’, tech-markets tend to be auto-preservative and to lead to winner-takes-all or winner-takes-most situations. Because of these features, tech-markets are highly concentrated and competition, instead of in-markets, take place between-markets or ecosystems. These tech markets’ characteristics, as well as catching the attention of many academics, governments, and regulators worldwide, are also disorienting for them. Faced with the pressure to provide answers, some CAs have commissioned external reports and others have conducted studies of their own. Moreover, the G7 competition authorities recently issued a “Common understanding” setting out their views on the challenges of digitalisation for competition policy. While the legal context, focus, and findings of each of these efforts varied significantly, the competition policy debate on the digital economy resulted fragmented and multi- faceted. There is a wide and nuanced spectrum of opinions regarding actual (and would-be) problems, and the possible solutions to those problems. Some would like to see more competition; others less. Some argue that competition law is under attack as incapable of delivering the benefits expected from competition. Some would like to curb competition assessment outcomes to protect national champions. Some others would like to expand the scope of competition law (thus introducing new standards complementary to consumer welfare), stretching it inasmuch as to use it to solve other societal problems (environment, employment, privacy, etc.). Others would go in the opposite direction, calling for a strict, traditional, purely economic-based antitrust enforcement. Some criticized the current ‘balancing of error costs’, suggesting that the current balance is wrongly tilted in favour of under enforcement. Consequently, they propose to revert the burden of proof as well as revise the thresholds for antitrust intervention to support an enforcement boost. Others consider such reforms not a priority and condemn primarily the timing and quality of remedies adopted in recent enforcement cases. Some others, again, believe that there may be limits to what competition enforcement alone may achieve in digital markets and advocate for additional regulatory interventions, which would apply only to a specific subset of subjects with strategic market status. Although some consensus for introducing digital regulators and subjecting tech-giants to a greater and tailored antitrust scrutiny have begun to emerge, the primary results of this healthy, multi- faceted, and diversified debate have been a lot of interesting discussions, some confusion, and often inaction (or, at least, absence of resolutory actions) due to the difficulties in answer the broad policy questions. Given those premises, in the paper I wrote together with Antonio Capobianco (Acting Head of the OECD Competition Division), we (i) attempt to provide a descriptive summary of the policy debate around digitalisation and competition (Section 2); (ii) analyse the main challenges brought on by digitalisation and address some of the most significant open questions CAs are currently facing such as whether new laws, powers, standards, or regulatory interventions are needed (Section 3); (iii) suggest a greater consideration of Blockchain technologies by CAs to counter tech- giants’ market supremacy (Section 4); and (iv) offer some practical suggestions for CAs on how to best deal with digitalisation and tech-markets (Section n. 5).