BCCP Conference and Policy Forum 2017
Topic:Regulatory Challenges in Digital Markets: Algorithms and Platform Competition
The tremendous growth of digital transactions –mainly through online platforms— has profoundly affected the way we interact and has opened vast opportunities to improve our lives. The disruptive impact of this process is driven by one core feature: its ability to reduce inefficiencies. Consumers have benefited from an unprecedented proliferation of new services and products that previously were simply too costly to be developed and marketed to customers. At the same time, network effects in platform business models have brought market power concerns back to the front stage. Who reaps the largest benefits and profits in super-efficient online markets? Consumers? Innovative firms? Incumbent firms? This conference aims to tackle these questions and discuss the need for and appropriateness of policy interventions in such quickly evolving markets. We especially will focus on regulatory issues related to the development of sharing economy platforms and the increased use of algorithms.
Policy Roundtable: Consumer and Competition Policy in Platform Markets
The emergence of online platforms has decreased transaction costs considerably, increased price transparency and hence enabled consumers to more easily compare and purchase products and services. At the same time, platforms may achieve market power leading to undesirable market outcomes. Is existing consumer protection law appropriate to address concerns arising on online platforms? Are existing regulations sufficient to address the particular policy concerns arising in these markets? How can the peculiarities of digital markets such as network effects be taken into account in competition policy?
Acting Chief Executive, UK Competition and Markets Authority
Policy Assistant to to Giovanni Buttarelli, European Data Protection Supervisor
Vice President, German Federal Cartel Office
Moderated by Amelia Fletcher (Professor of Competition Policy, University of East Anglia)
Session 1: Platform Competition: The Sharing Economy
The sharing economy relies on online platforms to bring together providers and consumers of goods and services. How do platforms compete in these two-sided markets characterized by direct and indirect network effects? Which pricing strategies do these new online platforms adopt? How does rapid innovation ubiquitous in these markets affect competition between platforms? How do new digital technologies transform business models and the way firms compete? What will be the major future challenges for the sharing economy, regulators, and consumer policy?
Bert Elwert Professor of Business Economics and Public Policy, Kelley School of Business, Indiana University
Presentation slides (pdf)
Professor of Information, Operations and Management Sciences, and Robert L. & Dale Atkins Rosen Faculty Fellow, Stern School of Business, New York University
Moderated by Roland Strausz (Professor of Economics, Humboldt University Berlin)
Session 2: Algorithms and Consumer Targeting
Digital markets are characterized by consumer targeting and customization of products and services. Firms such as Amazon or Google use algorithms to increase their product quality, such as search results or the targeting of advertising. These algorithms rely on past consumer search and browsing behavior to learn and improve results in real-time. This session discusses the extent to which the use of algorithms could harm consumers by behavioral discrimination, where firms track and profile consumers to recover their willingness to pay for particular goods and services, or by sophisticated data-driven price algorithms facilitating collusion. A large controversy in the use of algorithms is the extent they could lead to bias – not only in the things we buy but also in the news and entertainment we receive – in ways which may be against the interests of society. This panel will also discuss what potential sources of bias there may be and the extent to which intervention by consumer protection or competition authorities might be warranted.
Professor of Law, University of Tennessee
Sloan Distinguished Professor of Management Science and Professor of Marketing, MIT Sloan
Presentation slides (pdf)
Moderated by Oren Bar-Gill (William J. Friedman and Alicia Townsend Friedman Professor of Law and Economics, Harvard University)