In November 2021, the IEA was pleased to hold, in partnership with the Information Technology and Innovation Foundation, a conference on the Meaning of Competition featuring leading commentators and academics in the field.
The objective was to reflect, in the 75th anniversary year of Hayek’s lecture of the same title, on current trends in assertive antitrust enforcement in the digital economy. Does Hayek’s view of competition as a discovery process still hold today, in a world of social media and multi-sided markets?
The question is of pressing significance in light of policy developments in the UK and around the world. Earlier in the year the British government published for consultation its proposals to reform competition law, aimed at establishing a ‘pro-competitive framework’ for the digital economy.
A Digital Markets Unit within the Competition and Markets Authority (CMA) will become a specialist regulator for firms with Strategic Market Status (SMS): ‘substantial’ and ‘entrenched’ market power in at least one digital activity, where this market power gives the firm a ‘strategic position’.
The regulations proposed, for conduct of business, merger control and remedies, are far reaching. Each SMS firm would be given a legally binding code of conduct, prescribing how it is to operate to ensure fair trading, open choices and trust and transparency for users, and to anticipate and prevent exploitation of consumers and businesses or the exclusion of innovative competitors.
As the (undefined) concept of ‘digital markets’ covers a wide and increasing proportion of services and activities, the new framework would hand powers over a huge part of the economy to a regulator that is assumed to know how to run these complex, dynamic businesses fairly and competitively.