Designing Remedies for Digital Markets: The Interplay Between Antitrust and Regulation

Journal of Competition Law and Economics (2021)

52 Pages Posted: 23 Nov 2020 Last revised: 30 Nov 2021

See all articles by Filippo Lancieri

Filippo Lancieri

ETH Zurich Center For Law and Economics; Stigler Center

Caio Mario da Silva Pereira Neto

São Paulo Law School of Fundação Getulio Vargas FGV DIREITO SP

Date Written: August 16, 2021

Abstract

Regulatory interventions aimed at promoting competition in digital markets face a challenge: how to design remedies that actually improve welfare? This Article helps provide an answer to this question. First, it maps out the frontier of remedy design: Part I.A summarizes antitrust and regulatory remedies imposed on digital companies over the past decades, while Part I.B reviews nineteen reports on competition in digital markets to identify proposals to advance antitrust or regulatory interventions.

Part II, the core of the Article, builds on this review to propose a new, two-level framework for remedy design that integrates pro-competition antitrust and regulatory interventions as part of a single policy. First, at the substantive level, it develops a compounded error-cost framework that helps authorities choose between different remedies applicable to a given conduct: when policymakers accept higher risks of over-enforcement in deciding to intervene, they should compensate by taking lower risks of over-enforcement in remedy design, and vice-versa. Second, at the institutional level, the Article proposes that authorities consider separating three connected but different key activities in remedy design: (i) identifying harmful behavior; (ii) designing interventions; and (iii) monitoring and adapting remedies. It also outlines four criteria (legal mandate, need for technical expertise, relative risks of regulatory capture and overall administrative costs) that can help authorities allocate these tasks among different regulators.

Part III concludes by applying this framework to seven types of conduct that Part I identified as potentially problematic: (i) discrimination, unfair treatment and self-preferencing; (ii) exclusivity contracts; (iii) tying or bundling; (iv) MFNs and other price parity clauses; (v) refusals to deal, limited interoperability and lack of data portability; (vi) exploitative or exclusionary terms of service; and (vii) nudges, sludges and other concerns around user interfaces.

Keywords: antitrust, regulation, digital markets, remedies

Suggested Citation

Lancieri, Filippo and da Silva Pereira Neto, Caio Mario, Designing Remedies for Digital Markets: The Interplay Between Antitrust and Regulation (August 16, 2021). Journal of Competition Law and Economics (2021), Available at SSRN: https://ssrn.com/abstract=3704763 or http://dx.doi.org/10.2139/ssrn.3704763

Filippo Lancieri (Contact Author)

ETH Zurich Center For Law and Economics ( email )

ETH-Zentrum SEW E 26
CH-8092 Zurich, Zurich 8006
Switzerland

Stigler Center ( email )

Walker Hall
Chicago, IL 60637
United States

Caio Mario Da Silva Pereira Neto

São Paulo Law School of Fundação Getulio Vargas FGV DIREITO SP ( email )

R. Rocha, 233, Bela Vista
São Paulo, 01330-000
Brazil

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
1,077
Abstract Views
3,053
Rank
37,837
PlumX Metrics