On July 1, experts from the BRICS Competition Centre gave a presentation "Diversity: A New Value for Antitrust in the Digital Age" at the 17th international ASCOLA (Academic Society for Competition Law) Conference, which took place in Porto.
This year's conference's main topic was "Competition and Innovation in Digital Markets". The Centre's experts Anna Pozdnyakova and Daria Kotova spoke about the importance of diversity for the development of digital markets and the work of antitrust authorities.
As a property of a complex system (which a market or a digital platform/ecosystem is), diversity drives innovation and change. Just like biodiversity in ecosystems, diversity in digital platforms allows them to thrive and evolve, promoting innovative changes within the system. Thus, fostering of diverse and rich digital ecosystems will drive markets towards sustainability, noted the experts.
However, the cost of managing heterogeneous content for digital platforms is higher. They prefer to target the "average consumer" and regulate the distribution of content by algorithms. For example, the Chinese service Douyin (an analogue of TikTok) prioritizes content distributed by opaque algorithms, thereby preventing communication and exchange of information between users. According to experts, regulatory bodies should pay attention to such aspects of platforms' work in order to preserve producers' incentives to compete and safeguard consumers' rights to make a choice.
"In the era of digital ecosystems, diversity as a regulatory value helps to ensure competition among providers (of goods or content) within a complex system, making it more flexible, stable, innovative and thus attractive to users. A fair and balanced diversity within ecosystems and platforms will have a positive effect on the marketplace as well. Knowing that there are ecosystems open to diversity and competing with one another, including in quantity and richness of products offered, will give suppliers more incentive to develop new products and develop innovations",
said Daria Kotova.
In conclusion, the speakers highlighted some of the processes in the operation of platforms that antitrust authorities should pay attention to:
- Abuse of the platform's power (e.g., promoting its own products and services more aggressively to the detriment of competitors);
- Anticompetitive agreements (including vertical agreements with content providers on the platform);
- Merger deals that could hamper diversity.
ASCOLA is one of the leading international organizations in the field of competition law. The organization was founded in Munich at the Max Planck Institute for Innovation and Competition, in 2003. ASCOLA brings together several hundred researchers and academics from all continents involved in antitrust law, economics and politics.