Fwd: [Internet Policy] Restoring competition in “winnerall” digital platform markets

Copy pasting George Sadowsky’s response which reflects the local scenario.

In the last part of the 20th century, and continuing on to this day, a
consumer welfare standard has been the more dominant guiding principal for
industrial regulation in the United States, and all other things being
equal, that has translated into lower prices for consumers.

The earlier standard, which focused more upon a
structure-conduct-performance model for industries, used industry
performance as the output metric, and that did include consideration of
price levels achieved.

I’m beginning to see occasional papers questioning consumer selfare as a
good standard for markets, generally related to ICT, where what I call
‘predatory acquisition’ allows firms to acquire small firms that might
otherwise to grow up being viable competitors. Because the acquired firms
are so much smaller than the acquirers, such acquisitions do not come up
for regulatory review. These acquisitions generally involve small targeted
firms with quite concentrated intellectual capital combined with having
demonstrated viability feasibility. The result is an ever increasing
concentration of capital, and given the economics of scale that are rampant
in many ICT ventures, leads to the low prices that are acceptable to
regulators using consumer welfare metrics.

George Sadowsky Residence tel: +1.301.968
8300 Burdette Road, Apt B-472 Mobile:
Bethesda MD 20817-2831 USA Skype:
george.sadowsky@gmail.com www.georgesadowsky.org/

On Thu, Jan 30, 2020 at 9:27 PM Ali Hussein <ali@hussein.me.ke> wrote:

> Barrack
> Probably one of the most important reads this year. Thank you for sharing!
> Regards
> *Ali Hussein*
> Tel: +254 713 601113
> Twitter: @AliHKassim
> Skype: abu-jomo
> LinkedIn: ke.linkedin.com/in/alihkassim
> <ke.linkedin.com/in/alihkassim>
> Any information of a personal nature expressed in this email are purely
> mine and do not necessarily reflect the official positions of the
> organizations that I work with.
> On Thu, Jan 30, 2020 at 5:51 PM Barrack Otieno via kictanet <
> kictanet@lists.kictanet.or.ke> wrote:
>> Listers,
>> Might be of interest.
>> Regards
>> ———- Forwarded message ———
>> From: Richard Hill via InternetPolicy <internetpolicy@elists.isoc.org>
>> Date: Tue, 28 Jan 2020, 4:02 pm
>> Subject: [Internet Policy] Restoring competition in “winner-took-all”
>> digital platform markets
>> To: <internetpolicy@elists.isoc.org>
>> Here is a paper from UNCTAD on competition policy and digital platforms:
>> unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=2622
>> I copy-paste the highlights below.
>> Best,
>> Richard
>> ============
>> Digital platforms provide a variety of services such as marketplaces,
>> social
>> networking, search engines and payment systems. Their business model
>> relies
>> on data and data monetization for growth. These are multi-sided,
>> oligopolistic or monopolistic markets characterized by network effects,
>> high
>> economies of scale and scope, and increasing returns to scale, which
>> together raise barriers for new entry.
>> In digital markets, platforms compete for the market and not in the
>> market.
>> These features together with control over user data confer significant
>> market power to incumbent platforms in their respective markets. This has
>> raised concerns about competition and led the competition lawyers and
>> economists reflect on ways to restore the lost competition in digital
>> markets.
>> This paper suggests adapting competition law tools and analysis to the
>> realities of this new business model; reforming merger control regimes;
>> focusing not only on free but also fair competition in digital markets;
>> adopting regulatory measures such data openness and portability,
>> interoperability between online platforms.
>> The paper also questions the relevance of consumer welfare standard based
>> on
>> price effects and efficiency to the new business model of online
>> platforms.
>> It suggests adopting a broader framework including choice, quality,
>> privacy,
>> innovation, future competition and effective competition structure and
>> competitive process in competition law enforcement.
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