Layered form of regulation can improve digital markets
When do monopolies of digital platforms like those of Google, Meta and Amazon become too strong, and how do you give new entrants to the market a chance? Jasper van den Boom of the Tilburg Institute for Law, Technology and Society developed a new, layered form of regulation to better regulate digital markets. He will defend his doctoral dissertation on June 14, 2023 at Tilburg University.
The digital sector is a cornerstone of the modern economy, but regulating digital enterprises can be considered a new frontier for regulators and competition authorities that brings new challenges. Law scholar Jasper van den Boom developed new approaches to regulating digital markets by viewing them as part of a network industry. By combining insights from regulation in telecommunications with economics literature and management theory, he came up with a new regulatory framework called ‘progressive ecosystem regulation’.
In his dissertation Van den Boom firstly explains why digital platforms such as Google’s search engine, Meta’s social media platforms and Amazon’s Marketplace are prone to monopolization. He develops a theory of ‘digital natural monopoly’, which explains why competition in digital platform markets is likely to lead to concentration by its very nature.
Competition between ecosystems
In addition, he puts forward that competition in digital markets persists, even if there is monopoly in a market. He develops a conceptual framework for competition between digital ecosystems, which consists of group of actors and products. Digital enterprises compete to carve out a part of the digital network industry where they can exert control, and their strong position in a platform market can be used offensively or defensively to steer competition between ecosystems. Van den Boom then sets out four phases of ecosystem competition, which helps to explain when competition in the digital network industry is healthy and when it is likely to become problematic.
Based on these insights Van den Boom puts forward a proposal for ‘progressive ecosystem regulation’. The purpose of this regulation is to protect and empower entrants from large digital ecosystems so that they can develop new products and innovate disruptively. This regulatory framework would create three regulatory pools: a heavily regulated, lightly regulated and entrant pool. The layered regulatory framework allows regulators to adjust who receives protection under the regulation and who faces the burdens relatively quickly, so that the regulatory framework reflects the fast pace of innovation and changing nature of digital markets. With this proposal, the thesis challenges and enriches our existing notions on regulation and specifically how we should regulate digital markets.
Jasper van den Boom LLM will defend his dissertation on Wednesday 14 June, 2023, 13.30 hrs in the Auditorium of Tilburg University. The defense can also be attended by via livestream. Title dissertation: Regulating Competition in the Digital Network Industry - A Proposal for Progressive Ecosystem Regulation. Supervisor: Prof. G. Monti, co-supervisor: Dr. I.J.M.A. Graef.