WASHINGTON — The digital economy continues to expand at a rapid pace. The emergence of the second- and third-generation digital ecosystems and advances in cloud computing and artificial intelligence continue to transform how businesses operate and how consumers engage with technology. As this transformation accelerates, the need for a coherent competition policy becomes ever more critical. U.S. antitrust enforcement has struggled to keep up with the digital transformation, testing the limits of merger and monopolization enforcement and emerging concerns over algorithmic collusion.
Today, the Progressive Policy Institute (PPI) released a groundbreaking new report, “In Search of a Competition Policy for the Digital Sector,” authored by Diana L. Moss, Vice President and Director of Competition Policy at PPI, calls for a more clearly defined, coherent U.S. competition policy in the face of the ongoing expansion of the digital economy. Moss highlights how the digital sector’s unique economic business models and growth through acquisition pose challenges for competition enforcement.
“U.S. merger enforcement was largely dormant during the growth of the first-generation digital ecosystems.” said Moss. “Only recently have antitrust enforcers brought several digital merger cases while pursuing a number of monopolization actions against the oldest, large digital ecosystems. This “catch up” approach raises questions about the ability of antitrust to control the concentration of economic power in the digital sector, against the backdrop of rapid growth and innovation.”
PPI’s analysis puts out the call to revisit digital competition policy. The report describes the unique business models, economic features, and model of growth through acquisition that bear on market power in the digital sector. It then turns to unpacking antitrust’s difficult legacy, leading to three major recommended initiatives to help shape a more coherent future digital competition policy:
Moss emphasized the urgency of the issue, noting that rapid innovation continues to outpace antitrust enforcement efforts. “As digital firms expand in cloud and AI, antitrust agencies need to reassess policy approaches and directions for promoting competition.” she added.
The report serves as a call to action for the next U.S. administration and antitrust enforcers to modernize their approach to digital competition, ensuring that the digital sector remains a driver of innovation without concentrating power in the hands of a few major players.
Read and download the report here.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
