Competition and economics

Explanation of externalities on digital platforms

28.08.2020

Introduction One of the reasons why digital platform are special is the presence of externalities. Externalities (which are also known as network effects[1]) are an economic concept: they are a cost or benefit of an economic activity experienced by a third party which has no relation with the one causing the activity. Externalities arise from digital platforms because they act as economic agents matching two distinct groups of users, one on each side of the platform.[2] The users on one side have no direct relationship with the users on the other side of the platform, but each is affected by…

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M&A activity of the main digital platform providers

30.08.2020

Introduction In recent years, the main digital platform providers have been considerably active in the field of mergers and acquisitions (M&A). Over the period 2015-2017, the leading digital platforms, Google, Apple, Facebook, Amazon, and Microsoft (GAFAM) acquired 175 companies (Gautier and Lamesch 2020). This intense M&A activity of the main digital platforms has brought to the forefront the adequacy of existing merger control tools. Can M&A regulation be tightened so as to prevent the digital platforms retaining and extending their already substantial market power? Source: Gautier and Lamesch 2020. Are regulators watching? Some of the M&A activity of GAFAM (and…

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Amending German competition law for digital regulation

23.08.2021

Introduction Competition law poses complex problems in its application to digital business models. Many of these digital businesses are designed to operate on two-sided or multi-sided platforms. The presence of direct and indirect network effects[1] and the improved efficiency of algorithms needed to process increased amounts of available data, have contributed to the emergence of large and powerful players. These firms also extend their portfolios by acquiring innovative services, complementary products and existing talent through intense mergers and acquisitions (M&A) activity directed, especially, at promising start-ups. There is a widespread concern that the M&A activity carried out by large players…

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Towards gigabit networks – a few considerations from the United Kingdom[1]

06.06.2022

1: Introduction Many countries[2] agree that widely available gigabit-capable networks whether fixed or mobile will be needed and expected to increase competitiveness and productivity[3]. New telecommunication/ICT networks take a long time to build and expand and if economies are to benefit from gigabit-capable networks, significant investment will be needed. The following case study draws from the United Kingdom (UK) approach and sets out a few considerations that governments and ICT regulators may want to consider in moving their own economies onto the path of gigabit networks. The structure of the case study is as follows: Section 2 examines the investment…

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The infrastructure sharing imperative

25.08.2022

1 Infrastructure as a societal asset People rely on network infrastructure almost every day, from the moment they wake up until the moment they go to sleep (and often through the night as well). Water, electricity, gas, roads, rail and telecommunications underpin modern societies throughout the world. But for most people most of the time they are so taken for granted as to be almost invisible. It is almost impossible to imagine a world without utilities: disparate, pre-industrial, subsistence communities with minimal interaction between them. Despite its ubiquity and critical importance, infrastructure is under threat. War, famine, a pandemic, climate…

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Case studies

27.07.2020

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Related resources

27.07.2020

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