The UK’s Digital Competition Expert Panel was established in September 2018. The panel was asked to consider the potential opportunities and challenges the emerging digital economy may pose for competition and pro-competition policy, and to make recommendations on any changes that may be needed
In particular, the panel examined:
- the impacts of the emergence of a small number of big players in digital markets such as social media, e-commerce, search, and online advertising
- appropriate approaches to mergers, takeovers and anticompetitive practices in digital markets
- opportunities to enhance competition, to increase business innovation and expand consumer choice
- how best to assess consumer impacts in ad-funded products and services that are ‘free’ to consumers
The central conclusion of the review is that competition in digital markets should be sustained and promoted through a new approach, alongside the core conventional competition tools of merger control and antitrust enforcement.
The challenges to effective competition in digital markets do not come about solely because of platforms’ anti-competitive behavior and acquisition strategies. Their network-based and data-driven platform business models also tend to tip markets towards a single winner.
To make competition effective requires policy that changes that dynamic and creates space for businesses to start, compete and grow alongside and around the big platforms. This can be achieved through a pro-competition approach that sets rules and standards to change how a digital market works and creates new opportunities for competition, innovation and consumer choice. To deliver this, the report calls for a new digital markets unit with capabilities and resourcing to deliver greater competition, backed by new powers to set and enforce competition-enhancing rules.
The report was released as the UK made a Spring budget announcement, in which £200 million ($262.8mn) was allocated to invest in supercomputers, lasers and genetic research.
Nikolas Kairinos, CEO and Founder, Fountech.ai, said in a statement “there were a couple of positives to take away, and the tech sector will perhaps be most pleased by the contents of the Spring Statement”.
The allocation of £200 million to ensure the UK remains at the forefront of innovation and research will instill some confidence in the market and shows the government has not forgotten about tech companies driving innovation, he said, adding that the UK’s finance minister, Philip Hammond reiterated his commitment to democratizing the digital marketplace so that organizations of all sizes are able to compete on a level playing field.