policymakers demonstrate

224 Nikolaos Vettas
platforms provide the basis for aggregating and delivering content and services,
acting as intermediaries between providers and end users; the related network
effects, direct or indirect, will tend to promote high concentration, consumers
may be locked-in and first mover advantages may be of critical importance.
Service providers may have different interrelated routes for delivering digital
services, with some key market positions being contestable – one may expect
that ‘tipping’is a frequent phenomenon following some innovation. Combining
the above features, it is crucial for competition policy to prevent the creation
or reinforcement of entry barriers: it is not actual competition that matters so
much, but making sure that entry is allowed for efficient and innovating new
players. As a result, the more traditional analysis of competition policy, even
when proceeding to market definition and measuring market shares, may face
significant difficulties, since the boundaries are fluid. It is, in fact, important to
understand the underlying dynamics of the market in terms of technology and
strategic incentives.
Access to end user data is valuable since it may greatly facilitate price discrimination
and also versioning according to individual needs. Established,
large players in the market will tend to obtain a very significant advantage
through the access to such data relative to newcomers. In addition, by proceeding
to the combination of user data from multiple platforms, an owner of
such multiple platforms will tend to be able to offer a more valuable service.
The much enhanced ability to sell to wider sets of diverse buyers makes price
discrimination, or blocking access to content, or other services, a higher concern
relative to traditional markets. In particular, such practices that fragment
the markets, pose, almost by definition, challenges to the single market goal.
However, neither the literature nor practice necessarily suggests that imposing
price or content uniformity across all areas is necessarily the optimal policy.
Instead, imposing uniform prices and qualities across otherwise different areas
too soon, may prove an obstacle for market development.
Suggestions about how research can proceed could be organized around
four distinct themes. First, ‘digital’ markets may be different but they are still
markets and some of the issues arising in ‘digital’ markets can be found, in
some form, even if less systematically, in other markets. Therefore, the stock
of knowledge from the existent IO literature is valuable. This statement may
be obvious, but the temptation may emerge to ignore economic principles altogether
and to follow a completely formalistic approach, using the idiosyncrasies
of these new markets as a pretext. 49
What economics analysis has to offer is primarily the identification of efficiencies
that should be considered. Placing the maximization of economic welfare
as an anchor, it ensures that there is some consistency in legal approaches
that may otherwise run the risk of becoming too formalistic. Especially with
market shares that tend to be quite high, it may be too easy for competition