An Impact of Digitalization on Competition Policy: World’s Practice and Ukraine

Abstract

The article examines an impact of digitalization on modern competition policy. Author proves that a necessity to modify traditional instruments of competition policy is caused by such special features of economic rivalry at the digital markets as significant return on scale, network effects and growing importance of data. Author argues that competition authorities face challenges caused by digitalization at the almost all stages of determining of firm’s dominant position, especially in the case of determining of relevant market, its participants and estimation of their market share. Special issues of the activity of digital platforms as a key competition subjects at modern markets are analyzed. Author proves that in the most cases it is appropriate to consider each side of the platform as a separate market when the relevant market is determined. Determination of a single market of intermediation services is justified only if the single price is set for all platform clients and if there is the same degree of substitution of the services for each consumer group. The article shows that it is necessary to consider positive cross-group effect when SSNІP-test is used for economic analysis of digital platforms activity. The problems of evaluation of business platforms market share are exposed. Author argues that usage of revenues as a basis for market share calculation is not appropriate if platform sets zero-price. In this case market share should be calculated based on the number of user or intensity of usage. It is proven that the main criterion of competition policy efficiency – consumer welfare – should include not only the price but also such parameters as privacy, consumer choice, protection of personal data, switching costs. A necessity of modification of Ukrainian competition policy in response to challenges of digital era is proven.