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Ensuring ‘Competability’ in Digital Economy

Feb 24-2021   



Anti-trust has drawn much public attention of late and its development might weigh on the prospect of digital economy. In a recent media interview, Prof. Huang Yiping suggested that regulatory oversight should focus on regulating the behaviors of digital technology platforms with the aim of keeping the market open for competition and protecting consumer interests. He’s Deputy Dean of the NSD and Chairman of the Academic Committee of CF40.

 

Digital technology platforms enjoy the so-called long-tail effect. The more users a platform attracts, the more data it can amass and the better services it can offer. Owing to such technological features, the platforms tend to cause high market concentration, the consequence of which naturally arouse the concerns of consumers and regulatory authorities alike. Market concentration serves leading platforms well and it’s desirable that they transfer some benefits to consumers. The penchant of the platforms to keep all benefits to themselves would likely lead to some issues.

 

In the sphere of platform economy, the regulatory authorities should focus more on ‘competability’ than on market share. By ‘competability’ Prof. Huang meant the possibility for competitors to enter a certain market that already has a leading platform with a relatively high market share. But if the leading platform attempts to restrict the entry of new competitors, such actions must be reined in by the regulatory authorities.

 

The key of oversight is to draft regulations on data collection and analysis. As the digital economy grows on the strength of AI and machine learning, existing behemoths with massive data would possess unrivalled competitive edge, resulting in the inability of new comers to put up effective competition. In other words, the winner takes all.

 

What’s urgently needed is a complete set of data policies that governs such aspects of data as defining property rights, standardization, openness, trading, and pricing, among others. Benevolent data policies should be based on safeguarding competability, regulating actions of platforms, and protecting consumer interests. Only so can productive factors play positive roles.

 

Ensuring ‘Competability’ in Digital Economy

Feb 24-2021   



Anti-trust has drawn much public attention of late and its development might weigh on the prospect of digital economy. In a recent media interview, Prof. Huang Yiping suggested that regulatory oversight should focus on regulating the behaviors of digital technology platforms with the aim of keeping the market open for competition and protecting consumer interests. He’s Deputy Dean of the NSD and Chairman of the Academic Committee of CF40.

 

Digital technology platforms enjoy the so-called long-tail effect. The more users a platform attracts, the more data it can amass and the better services it can offer. Owing to such technological features, the platforms tend to cause high market concentration, the consequence of which naturally arouse the concerns of consumers and regulatory authorities alike. Market concentration serves leading platforms well and it’s desirable that they transfer some benefits to consumers. The penchant of the platforms to keep all benefits to themselves would likely lead to some issues.

 

In the sphere of platform economy, the regulatory authorities should focus more on ‘competability’ than on market share. By ‘competability’ Prof. Huang meant the possibility for competitors to enter a certain market that already has a leading platform with a relatively high market share. But if the leading platform attempts to restrict the entry of new competitors, such actions must be reined in by the regulatory authorities.

 

The key of oversight is to draft regulations on data collection and analysis. As the digital economy grows on the strength of AI and machine learning, existing behemoths with massive data would possess unrivalled competitive edge, resulting in the inability of new comers to put up effective competition. In other words, the winner takes all.

 

What’s urgently needed is a complete set of data policies that governs such aspects of data as defining property rights, standardization, openness, trading, and pricing, among others. Benevolent data policies should be based on safeguarding competability, regulating actions of platforms, and protecting consumer interests. Only so can productive factors play positive roles.