Antitrust and the Trust Machine (OECD Blockchain Policy Series)

Blockchain is an exciting technology with great but as yet unfulfilled potential. For competition and competition policy, it offers a number of promising opportunities, which agencies will wish to explore. However, from the standpoint of antitrust law the concerns remain the same. This paper explores the platform nature of a blockchain, how pricing on a blockchain works and how the blockchain fits into the supply chain. It considers the risks of anticompetitive behaviour by the blockchain, by users of the blockchain and of anticompetitive behaviour being directed towards the blockchain. It also sets out a range of possible opportunities that arise from the adoption of the technology. The paper argues that agencies should focus on the development of private permissioned blockchains, and specifically that they explore the design protocols of such blockchains and consider offering guidance and asking to participate as a node on these networks. It suggests that the second area of focus should be the risk that blockchains, particularly start-ups and decentralised permissionless blockchains, are excluded, either through foreclosure or acquisition by dominant incumbents, or as a result of successful lobbying for disproportionate anti-competitive regulations. However, as is the case for many new technologies, the first step for agencies should be exploratory market studies, such as those recently undertaken on big data and algorithms, to understand the nature of the technology and the risks and opportunities that it poses. The OECD’s pioneering work on the implications that blockchain technology has for competition law and policy offers a good place to start