TILEC Work In Progress: Jens Prüfer

Earlier work done at TILEC (Argenton and Prüfer, JCLE 2012; Prüfer and Schottmüller, TILEC Discussion Paper No. 2017-006; Graef and Prüfer, ESB 2018) has analyzed competition on data-driven markets and shown a very strong tendency towards monopolization/market tipping. Market tipping leads to lower innovation incentives of both the challengers and the dominant firm on these markets. We also made a policy proposal, a specific kind of mandatory data sharing between competitors, and showed that this can avoid market tipping (at least in theory). Since 2016, policy makers have expressed grown interest in these papers and in the proposal. Now, several European governments (incl. the Netherlands and the UK) and the EU Commission have moved forward. A major German party seems willing to draft a bill mandating data sharing on data-driven markets. They have asked us to formulate the economic logic behind such a bill. This TILEC meeting serves to discuss that logic and to draw on lessons across individual countries, which may improve the quality (and hence chance of success) of that bill.