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Comparative Impacts of Ex-Ante and Ex-Post Regulation in Digital Markets: An Event Study Analysis of Stock Price Reactions

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  • Arai Koki

    (Faculty of Business Studies, Kyoritsu Women’s University, Tokyo, Japan)

Abstract

In the analysis of digital markets and competition, it is imperative to consider the regulatory landscape. Specifically, with the shift from ex post to ex ante regulation in competition law, establishing a competitive environment reflective of regulatory costs becomes imperative. This study investigates the market’s assessment of ex ante regulation through stock price event analysis. The findings reveal that the market perceives a 10–20 % negative impact on businesses from ex ante regulation for each event upon finalization of the regulatory framework or identification of regulated entities. Unlike ex-post regulation, which targets specific businesses and yields varied impacts in competition law violations, ex ante regulation’s broader influence is remarkable. ex ante regulation incurs significant business costs, with the market assessing its impact as surpassing that of ex-post regulation when viewed holistically. Acknowledging these regulatory costs underscores the imperative for stringent oversight to guarantee the attainment of regulatory aims and objectives.

Suggested Citation

  • Arai Koki, 2025. "Comparative Impacts of Ex-Ante and Ex-Post Regulation in Digital Markets: An Event Study Analysis of Stock Price Reactions," Asian Journal of Law and Economics, De Gruyter, vol. 16(2), pages 283-305.
    • Handle: RePEc:bpj:ajlecn:v:16:y:2025:i:2:p:283-305:n:1003
    DOI: 10.1515/ajle-2024-2002
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    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • M38 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Government Policy and Regulation

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