The globalization of the Internet has led to unprecedented digital growth: Internet services based on new business models are competing with and disrupting traditional businesses. Companies from different sectors are converging in a single global market, expanding their range of services and their geographical reach.
Competition regulation has failed to adapt to the rapid growth of the Internet and the changing competitive environment in the digital economy. The rules differ for the same kinds of service and users, in the same geographical location, based only on differences in the underlying technologies or in the location of company headquarters.
Increasingly collaborative, open innovation processes are substituting the traditional R&D programs of companies. They boost digital innovation by helping to create start-ups and innovative companies. Open standards enable digital services be interoperable as well broaden markets.It is therefore necessary to review and modernize the regulatory framework. Competition policy should aim to defend competition and achieve results on a case by case basis. It should apply to transparent commercial offers. Competition policy muct respond to the transformation that is being driven by today’s digital revolution.
Features of the digital markets
These features should be considered in any analysis regarding competition or regulatory procedure.
- The services offered from local infrastructures in different countries or regions compete with services provided through the Internet on a global level.
- There are more and more business models based on free services and two-sided markets, in which the service provider is not paid by users. Instead, service providers are paid for accessing to data about users and/or for placing targeted advertising.
- The convergence of services produced in the markets has resulted in the development of equivalent services based on different competing technologies.
- Personal data has become a strategic asset for Internet companies and a key source of competitive advantage.
- Different companies with different business models compete throughout the Internet value chain for the same users, incomes, or times of use.