The BRICS Competition Centre expert Daria Kotova spoke at the annual Conference on competition and innovation organized by the Brazilian Institute of Competition and Innovation (IBCI). She spoke about digital ecosystems as complex systems and the potential of some features of complex systems for antitrust analysis.
The conference panel focused on the challenges antitrust agencies face when trying to analyze the importance of innovation in high-tech markets, particularly digital markets. Antitrust agencies understand the need to consider the pace of innovation when evaluating competition, but the dynamic and complex nature of the innovation process requires regulators with comparably dynamic and calibrated tools. Conventional neoclassical antitrust tools miss much in the development of high-tech markets. In particular, they do not fully account for the behavior of all current and potential market players when the trajectory or dynamics of the innovation process changes.
The panel discussed how insights from complexity economics can be useful for a more inclusive understanding of innovation processes in digital and other rapidly evolving markets. In particular, they discussed diversity as one of the fundamental properties of a complex system that allows it to evolve and remain sustainable.
"The more diverse a digital marketplace or individual digital ecosystem is, the more the marketplace or ecosystem allows independent competitor or complementary innovations to develop, the healthier its development will be. By analogy with nature - monocultures are always more susceptible to external risks and their development is unstable,"
said Daria Kotova.
Diversity should become the basis for a new value orientation of the antitrust, i.e., the preservation of market resilience, she is convinced.
Additionally, the discussion touched upon the idea of dominant design as a feature of the cycles of innovative development, as a result of which the market tends to one dominant production model. The participants discussed to what extent this peculiarity is harmful for the market, at what point the intervention of the antitrust agency is required and whether it is always justified.
Clearly, antitrust must and can adapt to the increasingly complex realities of the global digital economy. The next challenge for researchers is to translate the concepts they develop through the science of complex systems into a language that antitrust agencies understand. This will help in the development of specific analytical tools that will allow for more subtle and correct regulation of complex markets.