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The @EU_Competition digital report is out! Many, many thanks to @jcremer @yvesalexandre and Heike. Here's my reading on the concrete suggestions for adapting competition policy (THREAD).
1) Consumer welfare standard: Under-enforcement is the problem in the digital world. Even if consumer harm cannot be measured, platforms’ strategies to reduce competition should be forbidden in the absence of clear efficiency gains
2) Market definition: Less emphasis should be put on market definition, more on theories of harm. Think of aftermarkets if there is lock-in.
3) Market power: think of “intermediation power” and platforms being “unavoidable trading partners.”
3) Market power: think of “intermediation power” and platforms being “unavoidable trading partners.”
4) Error cost framework: Presume a conduct is anticompetitive until efficiencies shown. Err on side of consumers. Expected harm instead of balance of probabilities at p.51.
5) MFNs: Wide MFNs should be banned and narrow MFNs permitted IF inter-platform competition strong enough.
5) MFNs: Wide MFNs should be banned and narrow MFNs permitted IF inter-platform competition strong enough.
6) Self-preferencing: should be subject to effects analysis. The remedies should be restorative.
7) Data sharing: The report recommends some sort of sector inquiry (“scoping exercise”) of data sharing / pooling practices. We know too little to provide guidance.
7) Data sharing: The report recommends some sort of sector inquiry (“scoping exercise”) of data sharing / pooling practices. We know too little to provide guidance.
8) Data access under 102: This is the “essential facilities” discussion. The essential facilities doctrine (EDF) NOT fit for purpose in the digital world (p. 98). The assessment should take into account all features of the type of data, and whether data is truly indispensable...
...Investment incentives should be maintained. Detailed proposal on p.98-107, IMO main substantive part of the report. Need to read it in detail, but message is that EFD is NOT useful in the digital world. Nor should there be a “new product rule.”
9) Merger assessment: when large firms buy startups, an additional test: 1) Does acquiring firm benefit from network effects/entry barriers or data use, 2) Is target a potential or actual competitor, 3) Does elimination increase entry barriers?, 4) Are there efficiencies?
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