How the Digital Economy Challenges the Neoliberal Agenda: Lessons from the Antitrust Policies

Abstract

Conceived in the 1930s as a way to renew free market liberalism, neoliberal doctrines aim to institute a competitive order that would regulate the market as well as society. Yet, interpretations of how competition should be enforced have varied throughout history. The European Union, with its ordoliberal origins, tends to follow an interventionist approach while the United States, where the Chicago School has gained influence, fears that inadequate public interventions may diminish global efficiency. The digital revolution and the appearance of the Tech Giants introduces a new challenge. Faced with massive increasing returns to scale, the competition authorities initially reduced their interventionism to enjoy more market efficiency. But the emergence of digital platforms and the will to protect personal data from abusive uses pushes them now to adopt a new strategy for more interventions that goes beyond the economic and efficiency issues. This paper argues that the neoliberal vision is no longer accurate to regulate the digital economy. It shows that the platform economy is not an alternative way to manage the market, but an alternative to the market itself. To face these issues, a completely new conception of public regulation is therefore needed.

Next Stage of Global Capitalism: Digital Platforms and Rentier Capitalism

“…Economist Cédric Durand in his study, Techno-feudalism, examines the functioning of the digital economy in detail and makes a connection with the feudal economies of the past. Durand asserts that monopoly-driven digital corporations exploit the data generated by their enslaved consumers much like feudal lords would exploit the yields of the land cultivated by their serfs during the Middle Ages (Cayla, 2022). Durand analyzes the historical evolution of capitalism and the nature of the digital economy, and in his techno-feudalism hypothesis, claims that digitalization is far from the peak of modern and civilized capitalism; on the contrary, it is in a great recession.…”

“…To sum up, the global economy hovers on the verge of entering yet another phase of extensive reorganization. Over the past two decades, the emergence of the digital economy has presented new challenges for competition policies (Cayla, 2022). Monopolistic tendencies and protected intellectual property in digital economy cause greater concentration and market power compared to the non-digital economy.…”

“…The companies within this sector, aside from experiencing "exceptional profitability," should be considered as "the fact that they are near-monopoly distributors makes them public utilities and should subject them to more stringent regulations, aimed at preserving competition, innovation, and fair and open universal access" (Soros, 2018). Expressing concern about the possibility of these companies inducing addictive behavior and manipulating users' attention, Soros asserted that social media companies are leading people to relinquish their autonomy (Cayla, 2022). The feature that distinguishes flexible platforms from other platform models is that their devastating effect on traditional economic models is not limited to the valuation between goods and services and the market.…”