Competition in major digital markets is different in some ways from competition in more traditional markets. This sector often includes platform-based business models, multi-sided markets, network effects and economies of scale which render competition issues more complex. Unlike in most economic sectors, as the digital economy becomes increasingly interconnected some co-ordination and co-operation between firms could be unavoidable, and may indeed be pro-competitive. Finally, digital markets are characterised by high rates of investment and innovation, which lead to rapid technological progress in the sector, and to increased disruptive innovation.
The increasing prominence of the digital economy has been requiring competition authorities to devote more and more of their time to intellectual property-intensive and high technology industries. Since the impact of the digital sector extends beyond information goods and services to other areas of the economy, competition authorities are finding questions related to the digital economy to be increasingly significant for their work.
OECD work on innovation and competition
The OECD Competition Committee first held a roundtable discussion on merger review in emerging high innovation markets in 2002. Since then, the OECD has held discussions on wide variety of related topics ranging from competition, patents and innovation (2006 and 2009); to two sided-markets (2009), the digital economy (2012); on disruptive innovation (in general as well as in legal services, financial markets and road transport); and, more recently, on big data (2016).
In June 2017, more discussion topics included Algorithms and collusion, Radical Innovation in the Electricity Sector and Rethinking the use of traditional antitrust enforcement tools in multi-sided markets.
In January 2018, over 50 delegations world-wide have participated at two full-day workshops for competition officials on digital-related topics:
In 2016, the digital economy and innovation was selected as a long-term theme for discussions at the OECD Competition Committee. As a result, the Competition Committee has started to hold roundtables, hearings and other events on five main streams:
1. The relationship between the digital economy, competition law and innovation
This stream will analyse the role of competition law in shaping the digital economy, the evolving role for competition authorities in the digital world, and explore further work on multi-sided markets.
2. Challenges posed to prevailing antitrust tools and approaches
This stream will look at the suitability of existing antitrust tools and techniques for dealing with the digital economy and innovative disruption, at anticompetitive practices identified in the digital economy, at platforms becoming self-sustaining ecosystems and/or sealing themselves off from the rest of the Internet, at how to treat mergers in digital markets, and into the identification of appropriate remedies in digital and innovation-intensive sectors.
3. Practical challenges to competition enforcement
Topics will include the timing of intervention in digital and innovation-intensive markets, and the increased need for international co-operation and co-ordination in the digital economy.
4. Detailed industries and sectors
Under this stream, we propose not only to look at specific industries or sectors being disrupted or affected by digital economy (such as transportation, online advertising, search engines, online software platforms or E-commerce), but also to carry out case studies to analyse the development and evolution of a number of technological sectors in the past.
5. Review of regulations
This stream will consider how governments should review and revise existing regulations to avoid undue harm to competition, entrepreneurship and innovation while ensuring government policy objectives are met.
If you have questions, comments or would like further information regarding the OECD's work on competition, digital economy and innovation, please contact Antonio.CAPOBIANCO@oecd.org.
Some of this work will also contribute to the OECD Going Digital Project
Algorithms and competition: Friends or Foes, CPI Chronicle, Aug 2017
New energy in the electricity sector, May 2017
Documents and links
Consumer-facing remedies, 2018
The digital economy, 2012
Two sided-markets, 2009
Key materials, Tools & Guidance