Blockchain Competition

Abstract

Taking a dynamic and reflexive perspective on the interaction between technology, law and economics, the study focuses on the role of competition in shaping the economic, but also regulatory, eco-system in which blockchain technology becomes embedded. There is the promise that the technology and the social space it will foster will give rise to more competitive structures in the organisation of economic activity in the digital economy, in comparison to the current paradigm of digital platforms, which is highly centralised. The narrative of disruption has indeed been quite important in promoting the greater use of blockchain technology and has also framed the socio-technical ‘agencements’ that have so far guided regulatory action in this area. However, this narrative of disruption has also led to some hasty conclusions made in the literature as to the impotence of competition law to deal with an emergent digital space dominated by blockchain technology, predicting its eventual demise.

The study critically engages with this rhetoric and explains why it does not stand serious scrutiny and relies on a superficial analysis of Blockchain competition, as it does not consider the various ways in which the competitive strategies of economic actors shape the rules of the competitive game, the broader “industry architectures” that structure competitive interactions. The study then unveils how blockchain can contribute to competitive advantage, and can thus shape the distribution of surplus value in various industries. It then draws lessons for the work of regulators, in particular competition law enforcers. The last part of the study provides a detailed analysis of the competition law implications of blockchain technology for all aspects of competition law enforcement.

Keywords: Blockchain, Distributed Ledger Technology, Competition Law, Mining, Digital Wallets, DApps, Proof of Work, Proof of Stake, Competitive Advantage, Architectural Advantage, Platforms, Eco-systems, Co-opetition, Disruptive Innovation, ICOs

JEL Classification: K21, L1, L2, L4, L50, M20, O32