Friday, August 19, 2022

Value in Digital Platforms: The Choice of Tradeoffs in the Digital Markets Act

Value in Digital Platforms: The Choice of Tradeoffs in the Digital Markets Act

 

Carmelo Cennamo

Copenhagen Business School - Department of Strategy and Innovation; SDA Bocconi

Juan Santaló

Fundación Instituto de Empresa, S.L. - IE Business School

 

Abstract

The Digital Markets Act makes clear choices about important tradeoffs in value to constrain the arbitrary power and dominance of gatekeepers over digital markets and guarantee a more equitable distribution of value with business users. We argue that the extent those objectives will be realized depend largely on the nature of competition, both the type of competition (within vs. across platforms) and the competition dynamics (Winner-Take-All vs. differentiation). We anticipate that the choices about the tradeoffs in value taken in the DMA will prevent gatekeepers to monopolize the focal market but in very limited cases. This is because the DMA seems to protect specific competitors (some large business users against gatekeepers) rather than competition, as well as protecting only one type of competition (within platform) instead of also, and the more salient for contestability in digital markets, cross platform competition. We discuss these tradeoffs and the implications for competition, value distribution and welfare.

https://lawprofessors.typepad.com/antitrustprof_blog/2022/08/value-in-digital-platforms-the-choice-of-tradeoffs-in-the-digital-markets-act.html

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