Safeguarding Competition in Digital Markets : A Comparative Analysis of Emerging Policy and Regulatory Regimes

This paper presents a comparative analysis of the main policy and regulatory regimes currently suggested in the research literature to promote competition in digital markets. We review the causes of concentration in several digital markets, and differentiate the roles of structural and behavioral remedies to promote competition for and in incumbent digital platforms. Then, we analyze five regimes currently suggested in the research literature and explored by practitioners, ranging from precautionary competition policy and traditional ex ante regulatory remedies to ex post competition policy enforcement, ex post regulation and various self-regulation and co-regulation mechanisms. Finally, we discuss the appropriateness, tradeoffs, and challenges of applying the alternative regimes to four prototypical country scenarios with different microeconomic conditions. In a time when imitation is widespread, we conclude that policy and regulatory regimes, to be effective to promote competition and investment in digital markets, should observe country-specific, developmental, innovation, and market conditions and incentives. We also conclude that ex post competition policy and regulatory regimes might provide a better balance between raising contestability of digital markets and keeping incentives for innovation in most country scenarios, while the effectiveness of ex ante remedies is very dependent on exogenous conditions. This analysis should help policymakers to design measures to promote competition and investment in the digital economy, considering their local context and the tradeoffs of each regime currently proposed in the research literature