Antitrust regulation of Internet platforms in global outlook

Event report

Regulators across the globe are waking up to the concerns related to online markets and potential antitrust abuse. Regulators are trying to understand the business models and consumer behaviour that separates the online world from traditional markets in order to then determine the market power of digital platforms, added Mr James Hodge (Chief Economist, South African Competition Commission).

Ms Albana Karapanco (Senior Associate, Legal Services at PwC Albania) pointed that while all states are pushing towards antitrust regulations, the regulations are not enough to respond to the current platform economy.

Technology markets are dynamic and temporary dominance should not be mistaken for permanent dominance, cautioned  Mr Milton Mueller (Georgia Tech Internet Governance Project). He added that compatibility relationships and network effects are extremely important and powerful, and society has a very unstable view of this issue.  Citing the example of Microsoft, he mentioned that what ultimately broke that monopoly was not so much antitrust activity, but the rise of middleware in the form of Java that made browsers possible and that applications could be run independently of the Microsoft operating system. While platforms today are huge and have major economies of scale and major networks of externalities that make them so big. There is a need to decide whether we want to sacrifice compatibility and integration across these platforms for the sake of competition or whether people actually want this kind of compatibility.

On the difference between the Chinese and US approach Mr Qing He (Beijing University of Posts and Telecommunications) highlighted the difference in terms of the substantive doctrine, while Mueller suggested the differences are procedural. Mr Jet Zhisong Deng (Senior Partner, Dentons China) opined that while there is no significant difference between the Chinese, US or EU laws other than procedural, the main difference is in the change in the attitude of China’s top leadership to act.

Hodge highlighted the public interest aspect that South African regulators are enshrining in their regulation of online platforms to focus on promoting the participation of small businesses from South Africa, providing fairness in the bargaining relationship with global dominant players, which  Mueller argued should not be a component to be considered. He added that while dominance is easy to establish, a market inquiry needs to look at other factors that may hinder competition, which could relate to market practice rather than the dominant firm.

Issues related to the dynamic nature of the online business models and the challenges it poses to regulators, jurisdiction issues were highlighted by Hodge.

The question of whether internet standards should face greater scrutiny from antitrust regulators, as many internet standards are shaped by dominating global players, was raised along with the necessity of involving civil society and end users in the debate.

Competition law needs to safeguard and promote the diversity, shared Deng. The need for regulators to be educated in business models was emphasised by Hodge.

Hodge stressed the need for global cooperation, enhancing coordination, and cooperation between countries to ensure equal bargaining dynamics. Deng highlighted the importance for the USA and China to establish a cooperation mechanism to build up some regular communications.

Karapanco suggested the need for all the regulations being drafted across the globe to be coherent with one another.

By Amrita Choudhury

Session in numbers and graphs

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