Why Self-Preferencing and Why Preferences for Ex-Ante Regulations

Abstract

An important debate has been raging over the past six plus years within the international competition policy and law community regarding whether, why, when and to what degree ex-ante rules and regulations that anticipate future misconduct and harm should be introduced to support, complement, and/or replace competition rules when dealing with the questionable business practices and arrangements of digital firms, platforms, and ecosystems. This working paper essentially addresses two questions – why so much emphasis on self-preferencing and why so much preference for per se prohibitions and ex-ante rules to remedy self-preferencing and other digital competition challenges. The digital issues, opportunities, problems and unique challenges faced by smaller advanced economies like Canada, as well as by the competition laws and authorities and potential ex-ante regimes in emerging markets and developing economies, have to date received very little attention in this debate and in the very extensive and sophisticated digital platform literature.

The author of this working paper is attempting to make a small contribution to filling this gap, through drawing on his experience working on both sides of the competition law and regulation debate in Canada and elsewhere, including in a fairly large number of emerging market and developing economies and regions. The major message in the working paper is that enhanced understanding of the many complex issues, questions, tensions and paradoxes raised by the current digital competition discourse and debate is needed, before these national and sub-national economies, jurisdictions and authorities are in a position to fully consider and assess whether the ex-ante regulatory option is “fit for their purpose.” In short, over the next five plus years, these economies, jurisdictions and authorities should think twice before following the ex-ante regulatory leaders into this ex-ante regulatory sandbox.

Keywords: competition policy and law, consumer protection, privacy, digital markets and platforms

JEL Classification: D04, D18, D43,L40,L51