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The concentration of digital markets: How to preserve the conditions for effective and undistorted competition?

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  • Frédéric Marty

Abstract

The policy initiatives announced on both sides of the Atlantic to complement competition rules focus on two key dimensions: the contestability of markets on the one hand and fairness in their functioning on the other. The underlying idea is that the market positions of Big Tech would be inexpugnable - insofar as high barriers to entry protect them from self-regulating competition and insofar as they would have regulatory power over their respective ecosystems. Competition for the market would no longer be free, and competition in the market would be distorted. Our purpose in this working paper is to discuss these two dimensions. Are digital markets still contestable, and is the competition in them still competition on the merits? Finally, we discuss the remedies proposed to address these two alleged phenomena. La concentration des marchés numériques : Comment préserver les conditions d'une concurrence effective pour le marché et d'une concurrence non faussée dans le marché ? Les initiatives politiques annoncées de part et d’autre de l’Atlantique pour compléter les règles de concurrence mettent l’accent sur deux dimensions essentielles : la contestabilité des marchés d’une part et la loyauté dans le fonctionnement dans leur fonctionnement d’autre part. L’idée sous-jacente est la suivante : les positions de marché des grandes entreprises du numérique seraient inexpugnables – dans la mesure où de fortes barrières à l’entrée les protègent d’un caractère auto-régulateur de la concurrence et dans la mesure où elles jouiraient d’un pouvoir de régulation sur leurs écosystèmes respectifs. La concurrence pour le marché ne serait plus libre et la concurrence dans le marché serait faussée. Notre propos dans ce document de travail est de discuter ces deux dimensions. Les marchés numériques sont-ils toujours contestables et la concurrence qui s’y exerce est-elle encore une concurrence par les mérites ? Nous discutons enfin les remèdes proposés pour répondre à ces deux phénomènes allégués.

Suggested Citation

  • Frédéric Marty, 2021. "The concentration of digital markets: How to preserve the conditions for effective and undistorted competition?," CIRANO Working Papers 2021s-27, CIRANO.
    • Handle: RePEc:cir:cirwor:2021s-27
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    File URL: https://cirano.qc.ca/files/publications/2021s-27.pdf
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    References listed on IDEAS

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    1. Patrice Bougette & Oliver Budzinski & Frédéric Marty, 2019. "Exploitative Abuse and Abuse of Economic Dependence: What Can We Learn From an Industrial Organization Approach?," Revue d'économie politique, Dalloz, vol. 129(2), pages 261-286.
    2. Frédéric Marty, 2021. "Competition and Regulatory Challenges in Digital Markets: How to Tackle the Issue of Self-Preferencing?," Working Papers halshs-03227392, HAL.
    3. Woodcock, Ramsi, 2020. "The Contrasting Approaches to Power of the Modern State and the Antitrust Laws: Lessons for Platform Regulation," LawArXiv 73fnh, Center for Open Science.
    4. Frédéric Marty & Julien Pillot, 2021. "Cooperation, dependence, and eviction: how platform-to-business coopetition relationships should be addressed in mobile telephony ecosystems," SciencePo Working papers Main halshs-03202013, HAL.
    5. CABRAL Luis & HAUCAP Justus & PARKER Geoffrey & PETROPOULOS Georgios & VALLETTI Tommaso & VAN ALSTYNE Marshall, 2021. "The EU Digital Markets Act," JRC Research Reports JRC122910, Joint Research Centre.
    6. Baumol, William J & Ordover, Janusz A, 1985. "Use of Antitrust to Subvert Competition," Journal of Law and Economics, University of Chicago Press, vol. 28(2), pages 247-265, May.
    7. Frédéric Marty, 2021. "Competition and Regulation Challenges in Digital Markets: How to Tackle the Issue of Self-Preferencing?," Post-Print halshs-03427287, HAL.
    8. Frédéric Marty & Thierry Warin, 2020. "Keystone Players and Complementors: An Innovation Perspective," CIRANO Working Papers 2020s-61, CIRANO.
    9. Thierry Warin & Nathalie de Marcellis-Warin & Antoine Troadec & William Sanger & Bertrand Nembot, 2014. "Un état des lieux sur les données massives," CIRANO Burgundy Reports 2014rb-01, CIRANO.
    10. Frédéric Marty, 2019. "Plateformes de commerce en ligne et abus de position dominante : réflexions sur les possibilités d’abus d’exploitation et de dépendance économique," Post-Print halshs-02277917, HAL.
    11. Thomas Davenport & Abhijit Guha & Dhruv Grewal & Timna Bressgott, 2020. "How artificial intelligence will change the future of marketing," Journal of the Academy of Marketing Science, Springer, vol. 48(1), pages 24-42, January.
    12. Frédéric Marty, 2020. "Accès aux données, coopétition intra-plateforme et concurrence inter-plateformes numériques," Revue d'économie industrielle, De Boeck Université, vol. 0(1), pages 221-246.
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    More about this item

    Keywords

    contestability; fairness; loyalty; Big Tech; concentration; exclusionary abuses; contestabilité; loyauté de la concurrence; équité; Big Tech; concentration; abus d’éviction;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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