TY - JOUR
T1 - Equitable interoperability: The 'super tool' of digital platform governance
AU - Scott Morton, Fiona M.
AU - Crawford, Gregory S.
AU - Crémer, Jacques
AU - Dinielli, David
AU - Fletcher, Amelia
AU - Heidhues, Paul
AU - Schnitzer, Monika
PY - 2021/10/27
Y1 - 2021/10/27
N2 - This paper addresses interoperability a “super tool” to promote and preserve competition in digital platform markets where network effects are strong. As is widely acknowledged, these markets have an inherent tendency towards concentration, leaving consumers with little competition in the market. Mandated interoperability is a form of regulation that is less intrusive than many other forms and is particularly suited to digital business models and fast changing digital technology. We introduce the concept of “equitable interoperability,” which means that not only can an entrant join the platform, but it can join on qualitatively equal terms as others, without being discriminated against by the dominant platform that might have its own competing service. Carefully implemented, equitable interoperability breaks down entry barriers which paves the way for new entrants, which in turn creates competition and consumer choice. Interoperability transforms what might have been competition for the market into competition in the market, which is a more efficient and effective form of competition.
AB - This paper addresses interoperability a “super tool” to promote and preserve competition in digital platform markets where network effects are strong. As is widely acknowledged, these markets have an inherent tendency towards concentration, leaving consumers with little competition in the market. Mandated interoperability is a form of regulation that is less intrusive than many other forms and is particularly suited to digital business models and fast changing digital technology. We introduce the concept of “equitable interoperability,” which means that not only can an entrant join the platform, but it can join on qualitatively equal terms as others, without being discriminated against by the dominant platform that might have its own competing service. Carefully implemented, equitable interoperability breaks down entry barriers which paves the way for new entrants, which in turn creates competition and consumer choice. Interoperability transforms what might have been competition for the market into competition in the market, which is a more efficient and effective form of competition.
KW - Competition Policy
KW - Regulation
KW - Digital Economy
M3 - Article
VL - 40
JO - Yale Journal on Regulation
JF - Yale Journal on Regulation
IS - 3
ER -