![]() ![]() More recently, Nokia controlled almost 50% of the mobile phone market. In the early 20th century, people assumed Standard Oil to be an immovable “monopoly.” Nobody could have predicted that Thomas Edison would outwit John D. History teaches that competition and innovation in the market are unpredictable. Yes, the most successful ones achieve a “durable position.” But even then, they need to keep up their game and look out for existing and potential competitors. In an unregulated market, companies invest, innovate, and improve to win the competition and attract consumers. There is no such goal as to compete more. The DMA threatens to throw up hurdles to innovationĬompetition is only a means to an end, not the end in itself. ![]() The major finding's of report on the EU's #DigitalMarketAct When EU legislators assume platforms to be bad only because they are big, one question is left ignored – how did they manage to become big? The answer of course primarily by out-competing their predecessors with what consumers have considered to be a superior service. Since platforms provide advantages of a large network economy, their size is intimately connected with their success. The size of the platform is another crucial part of that package of benefits for consumers. Instead of constituting an “abuse of power”, these are on the contrary services that users benefit from. Too much choice can actually lower consumer welfare.įilters, clear structures, pre-installed software, default settings, priorities and rating – all of the so-called “limitations” which platforms impose are, in fact, the rescue ships in the vast ocean of the internet. Users are not interested in maximizing but in optimizing choice. That, however, is a misconception of consumer preferences. □ Russia opens criminal investigation on MetaĮU legislators think that such measures will benefit consumers, assuming this would increase the number of alternatives online. □ EU countries asked Big Tech to cover the Easter flank with fact-checking □ This week's Digital Brief is out! On the agenda: In other words, platforms will need to surrender their competitive advantage and business models to continue operations, all under the threat of massive fines. Shopping platforms like Amazon will be prohibited from privileging businesses that are using their ancillary services, like “Fulfilment by Amazon.” Search engines like Google will need to share search data with competing engines. In a bid to help smaller enterprises, the DMA will ban or mandate certain business practices of these so-called “gatekeepers”.įor example, Operating System (OS) providers like Apple and Google will be forced to allow consumers to use third-party apps or app stores without approval. At the core of the act is the concept of a “gatekeeper,” a concept which refers to platforms that have “a significant impact on the internal market” and that operate as an “important gateway for business users to reach end-users” and enjoy (or are projected to secure) an “entrenched and durable position.”Ĭompanies which fit these vaguely defined criteria, under the interpretation of the regulator, will be assumed to behave anti-competitively. ![]() Undermine platforms free#We explain this in detail in the Lithuanian Free Market Institute’s new study “ Digital Market Act: Competition, Private Property, Innovation and the Interests of the Users“. Unfortunately, the impact of the current EU proposal, which is likely to affect every player in the European market may turn the tides in a direction opposite to the one aspired for by the European Commission. It is therefore vital to take a closer look at the reasons for that. Only a single European company (Siemens) has made it into the top 20 of innovative firms, which is dominated by American and Chinese companies. They are right that EU member states are losing the innovation game. ![]()
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