From Digital to Blockchain Markets: What Role for Antitrust and Regulation

Abstract

In the context of antitrust, technology is not the driver of anticompetitive conduct in digital markets, nor is punishing big companies the solution. It is most likely that markets will shift from centralized closed platforms into decentralized, open networks based on blockchain technologies. Blockchain technology built on a consensus mechanism can make intermediaries [or third parties] unnecessary. Antitrust enforcers should encourage the innovation process simply by deterring those intermediaries from engaging in anticompetitive conduct that might slow the innovation process down while providing support to those companies as they often have the best resources and knowledge to increase innovation. On the other hand, although blockchain technology presents the potential for future opportunities, it is far from being perfect; the risk of collusion, for example, is particularly high in private blockchains. Therefore, the success of blockchain relies on the trust of people in this new technology, which if not used appropriately can damage instead of benefit markets and consumers. Similar to the Internet, antitrust enforcers and regulators are essential in developing trust in blockchain and to make decentralized system of democratic markets based on blockchain technology viable.

Keywords: antitrust, blockchain, digital markets, artificial intelligence, algorithm, regulation, internet, open networks, smart contract, innovation

JEL Classification: D4, D42, K21, L5, L12, L17, L86, O31