A PYMNTS Company

Why Sound Law and Economics Should Guide Competition Policy in the Digital Economy

By  |  June 23, 2019

By Dirk Auer & Geoffrey A. Manne (International Center for Law & Economics); Aurelien Portuese (St Mary’s University London) & Thibault Schrepel (Utrecht University School of Law)

In our submission, we argue that competition policy in the digital economy should be based on sound, theoretical underpinnings and rigorous, evidence-based analysis, best encapsulated in the “law and economics” approach. Despite many expressed fears to the contrary, digital markets are not inherently prone to anti-competitive behavior, and the weight of economic theory and evidence offer little support for the asserted risk of harm. We thus argue that competition intervention should take into account the uncertainty of harm, the presence of countervailing benefits and the problems of devising an effective remedy.

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