The Digital Economy

Friso Bostoen’s new book, Abuse of Platform Power: Leveraging Conduct in Digital Markets under EU Competition Law and Beyond, outlines how antitrust agencies and policymakers should tackle market power in the platform economy. The following is an adaptation of the book’s introduction.

Simonetta Vezzoso weighs in on the policy debate on algorithmic competition.

Michal Gal discusses the regulatory hurdles to deal with the impacts of algorithmic price collusion. In the meantime, she says, market fixes include algorithmic consumers and platform nudges to mitigate price coordination.

Axel Gautier, Ashwin Ittoo, and Pieter van Cleynenbreugel write that the practice of pricing algorithms tacitly colluding remains theoretical for now, and technological obstacles render it very unlikely in the short term. However, regulators must still prepare for a future in which artificial intelligence achieves the necessary sophistication to collude.

Oliver Budzinski and Victoriia Noskova discuss in their publication why merger simulations are not more widely used by competition authorities and in front of the courts to predict future effects of mergers despite advancements in availability of data, AI and computational power. The institutional setting is an essential factor for computational antitrust tools to be accepted and applied by competition authorities.

Maurice Stucke explains three policy approaches to algorithmic collusion and discrimination, and makes the case for a broader ecosystem approach that addresses not only the shortcomings of current antitrust law and merger review, but extends beyond them for a comprehensive policy response to the many risks associated with artificial intelligence.

Why ban competitive offers in the online world when they’re allowed offline? Big tech wants plain vanilla broadband pricing because it forecloses platform competition.

Does investing in information technology (IT) enable firms to “scale without mass” and increase their market share? In a new paper, Erik Brynjolfsson, Wang Jin, and Xiupeng Wang examine how IT affects firm size, market concentration, and the labor share of revenue.

New research indicates that FinTech lending has not been as ‘disruptive’ in risk-based pricing as claimed. While FinTech has provided increased loan access to some individuals, reliance on traditional credit scoring and spillovers from banking regulations leads to mispricing and cross-subsidization of borrowers. The authors suggest alternatives to allocate capital efficiently and improve financial inclusion.

Companies increasingly use sophisticated computational tools to compete, particularly in digital markets. Giovanna Massarotto outlines how antitrust agencies must similarly modernize and adopt advanced technologies to address complex antitrust enforcement challenges effectively and remain relevant.