The fast pace of technological development has enabled the expansion of digital services and new business models and delivery mechanisms in traditional business areas. These changes have brought benefits to consumers in terms of product choice, comparability and access, and opportunities for new and existing businesses. Digital businesses have experienced rapid growth and global expansion and the Covid-19 pandemic has accelerated the shift to online purchasing and delivery channels. Despite the clear benefits derived by many from digital markets, a new set of challenges have also emerged as discussed in the first part of this blog series “Competition and the Digital Economy”[1]. These involve a range of policy issues, including in the areas of consumer protection, the labour market and competition regulation. From a competition policy perspective, policy debates have centred on maximising the pro-competitive effects of digital markets, while guarding against the potential negative long-term structural effects on markets and economies, and possibly, market conduct abuses.

The increasing digital divide between and within countries has also raised concerns for policy makers and regulators. Competition regulators around the world are grappling to find the most appropriate approaches and tools for dealing with issues emerging in digital markets, including the prevalence of dominant platforms including Google and Amazon, new forms of collusion such as data sharing, and underenforcement in mergers which occur when a merger that should have been blocked is allowed to go through such as the Facebook/Instagram merger in 2012.

Authorities around the world have taken various steps in dealing with these new but pressing issues :

• The United Kingdom Competition and Market Authority has formed a Digital Regulation Cooperation Forum, made up of the Competition and Markets Authority, Information Commissioners Office and Office of Communication, as a means of supporting regulator coordination for online services and other areas of mutual importance.
• In the prominent Google/Fitbit merger, the European Union Directorate-General (DG: COMP) for Competition made use of Technology Assisted Review (TSAR) to manage the vast document volumes needed for the analysis – which saw over 1 million documents reviewed over the course of the investigation.
• The Bundeskartellamt, the German competition authority, has taken active steps to create consistency in abuse of dominance cases by defining new provisions for dominant platforms based on learnings from cases.

The Competition Commission of South Africa has also started taking active steps to deal with these rising issues including launching an online intermediation platforms market inquiry; and the publication of a paper on competition in the digital economy paper, which sets out the ways in which South Africa’s competition laws can be implemented to achieve equitable outcomes in the digital economy and the Competition Commission’s intentions in this regard. The Commission is also actively collaborating with the DG:COMP to cross-share knowledge.

All of these are important steps and it seems that wider collaboration and coordination will be needed to effectively resolve competition issues in the digital economy. This includes collaboration within a jurisdiction between the relevant regulators and experts in the industry such as data privacy regulators; external collaboration with other jurisdictions to share knowledge and resources on these new and complex issues within digital markets; and coordination across economic regions in order to create consistency in case decisions and to achieve better regulatory outcomes, especially when investigating super dominant platforms. Fortunately – there is a common desire for consistency across jurisdictions not only from the authorities, but also from firms involved in the digital economy, all of whom will benefit from a standardised approach to the common challenges they experience across different geographies.