REGULATORS SHOULD LIMIT ECONOMIC POWER OF DIGITAL PLATFORMS MORE ACTIVELY

BRICS Antimonopoly Centre presented a Report on new approaches to competition protection in the digital economy at the VI BRICS Competition Conference

The Report was published in the night of 18 September on bricscompetition.org; it is available to public at large in English. Executive summaries on the languages of each BRICS country will be published in the near future.

The study analyses antimonopoly regulation on digital markets all over the world and the latest BRICS experience. The researchers exposed regulatory gaps in those jurisdictions where development of digital economy is ahead of the law and enforcement practice. It also compares approaches of BRICS antimonopoly regulators.

The Report was presented by its main authors and masterminds, Director of the Institute of Law and Development, Higher School of Economics – Skolkovo and BRICS Antimonopoly Centre, Alexei Ivanov, and Prof. Ioannis Lianos, University College London, as well as heads of country research teams that worked on the report. Honorary invited guests gave their expert opinions, including a world-famous economist, Prof. Luigi Zingales from Booth School of Business.

Andrey Tsarikovskiy, Stats-Secretary, Deputy Head of FAS:

“Competition authorities base their work to a considerable extent on expert-and-analytical base created by scholars and researchers. Academic expertise is becoming of special important nowadays with active development of digital economy and we must react to new challenges. A strategic, academic view on competition protection policy, on the one hand, and a practical approach of antimonopoly bodies on the other – are like two wings for an antimonopoly regulation bird that can fly and gain altitude only in cooperation and collaboration between regulators and the academic-and-expert community”.

Prof. Luigi Zingales Booth School of Business:

“BRICS Antimonopoly Centre has done huge work to draft the Report.  What I expect from it – in particular, specific proposals on coordinating efforts of BRICS competition authorities. For example, under the frame of antimonopoly control over global mergers, because together they are truly able to impact conduct of global digital platforms that have obtained colossal market power in the modern economy”.

Alexei Ivanov, Director of the Institute of Law and Development, Higher School of Economics – Skolkovo and BRICS Antimonopoly Centre:

“The process of Report writing was aligned with the spirit of the age – a network of international experts was formed on the basis of BRICS Antimonopoly Centre, first of all from BRICS but also from Europe and the US. This network worked in several formats – face-to-face meetings with “brain storms” and collective remote work with texts and data. I think that the fact of organizing a network of the leading scholars from BRICS is already a success. The Report gives a detailed analysis of competition dynamics under large-scale digitalization of the world economy. We focused on the problems and interests of developing markets, first of all, BRICS, evidently. Our study is designed to stimulate expansion of the expert community and somewhere considerably review the current model of competition regulation, which has already resulted in an unprecedented growth of digital giants and economic inequality in the world. The Report also gives recommendations for antimonopoly bodies how to meet new challenges of the digital epoch. For example, we believe that regulators should be more active in restricting a growth of economic power of digital platforms, particularly, by restricting their appetites for acquisition of competitors and penetrating adjacent markets. The most valuable in the report is exactly its academic analysis of the challenges for antimonopoly regulation. In our opinion, the key development in the global competition policy should be facilitating openness of digital platforms, reduction of their manipulative potential and eliminating monopolistic barriers that prevent innovative development of our countries”.

Digitalization plays an essential role in globalization. At the same time, it accelerates a growth of inequality at the global and local scale, which is one of the key challenges for further development of digital economy. Achievements in machine learning, growth of computer capacities, development of blockchain technology, and increasing accessibility of information – these trends keep changing the global economy towards developing “digital capitalism”. Emerging “fin-tech industry”, for example, is related to special forms of digital competition that differ significantly from competition in traditional economy. These changes incur numerous risks and problems of competition support in the digital environment, especially in view of the growing influence of digital platforms and increasing inequality.

The existing approaches to new “digital” challenges often automatically copy the legal tradition established at previous stages of industrial development. It creates fragmented, isolated legal regimes to regulate digital economy phenomena such as big data, digital platforms, social networks, artificial intelligence, etc. Thus, legislators cannot form an integral picture of “digital future”, beneficial for the society and consumers, which means that the legal status-quo is maintained in the balance of power at the world market, digital giants preserve their influence. In such a situation constructive development of the tools of competition law and an integrated view on interplay with other branches of law become even more important.