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The economics of international competition policy: New challenges in the light of digitization?

Oliver Budzinski

No 135, Ilmenau Economics Discussion Papers from Ilmenau University of Technology, Institute of Economics

Abstract: The International Competition Network (ICN) celebrates its 20th birthday in 2020. It governs global competition by providing a cooperative forum for (mostly national) competition authorities from all around the world. In the absence of binding global competition rules and antitrust laws, it attempts to coordinate national and supranational competition policies by providing best practice recommendations and exercising peer pressure on deviating regimes. While the first twenty years of the ICN have been mostly a success story, the ubiquitous process of digitization poses new challenges to the voluntary and informal coordination of decentralized competition policies governing pro- and anticompetitive arrangements and conduct on international and intercontinental markets. First, the digitization of markets and goods increases the number of cross-border, interjurisdictional cases regarding cartels, mergers and acquisitions, as well as anticompetitive market behavior. Second, digital platforms and data-based business models increase the probability of dominant companies on intercontinental scales as well as problems of economic dependency on few global player companies. Third, the economics of digital platforms and data-based competition strategies partly differ from traditional standard economics and are still being developed in the academic world. Consequently, the previous convergence of competition policy practices across jurisdictions tends to shift towards a process of divergence with respect of how to deal with innovative pro- and anticompetitive conduct in the digital world. This essay discusses the influence of the effects from digitization on the problems of (only soft-coordinated) national competition policies in international markets like cross-border externalities, costs and burden of multiple procedures, loopholes in the protection of global competition, and the diversity of societies and competition regimes. It concludes by outlining the challenges that the ICN will face in its third decade.

Keywords: international competition policy; international antitrust; International Competition Network; global governance; digitization; industrial economics; law and economics; international economics; international organizations; international business (search for similar items in EconPapers)
JEL-codes: F02 F53 F55 K21 L40 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-com, nep-cse, nep-ict, nep-ind and nep-law
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