Digital markets require a fresh approach to competition policy

In a free and open market, competition drives business to offer the best possible range of goods and services at the best possible prices. This is good for society: effective competition drives enterprise and efficiency, creating a wider choice for consumers and helping to reduce prices and improve quality.

Competition policy, adopted and applied by governments and regulatory authorities across the world, is concerned with the application of rules to make sure businesses and companies compete fairly. It creates a framework that, if applied consistently, should make markets work better. The digital economy is, however, disrupting existing market structures.  The rapid take-up of technologies, including mobile communications, digital platforms, big data, cloud computing and social media are changing the nature of products and services and the way people interact. While offering enormous potential to enrich peoples’ lives and drive economic development, this change is having a huge impact on existing business models.  Existing competition policy frameworks may be inappropriate for the new market dynamics.

Resetting Competition Policy Frameworks for the Digital Ecosystem, a study published by the GSMA and the Competition Economists Group, assesses how governments and regulatory authorities can update competition and regulatory frameworks to realise the full potential of the digital economy. The report makes a number of policy recommendations that, adapted to a country’s specific legal and regulatory context, will provide a solid foundation for ongoing competition, investment and innovation.
Over the coming months, the GSMA will work with competition authorities and governments globally to explore how the recommendations contained in the report can best be applied in their national market — for the good of society, business and the evolving digital economy.

This latest report builds on The Internet Value Chain study, which examines the structure and economics of this new landscape.