Over the course of a single day, most consumers will come into contact with at least one product that is offered to them at a price of zero. Business models centred around the zero-price provision of products are not new. However, in the digital economy, new zero-price markets have arisen with their own unique characteristics and vast scope.
The OECD held a discussion in November 2018 to cover several particular challenges associated with quality in zero-price markets, including:
- Identifying what constitutes a dimension of quality competition in a zero price market. These can, depending on the market, include privacy, exposure to advertising content, or ease of switching.
- Overcoming the challenges associated with competition analysis in the zero price economy. Competition authorities may have to adapt their analytical tools in the absence of monetary prices.
- Addressing demand-side concerns in the zero-price economy. These range from the potential for deceptive or unfair contract terms, to information asymmetries causing market failures, to consumer biases in decision-making. Cooperation between competition, consumer protection and data protection authorities, as well as sector regulators, will be needed to diagnose demand-side problems and develop procompetitive, consumer welfare-enhancing solutions.
The discussion was held during a joint meeting of the OECD Consumer Protection and Competition committees.
