When do monopolies of digital platforms like those of Google, Meta and Amazon become too strong, and how do you give new entrants a chance? Jasper van den Boom of the Tilburg Institute for Law, Technology and Society developed a new, layered form of regulation to better regulate digital markets. He will receive his doctorate on the research at Tilburg University on June 14, 2023.
The digital sector is a cornerstone of the modern economy, but regulating digital businesses is a new area for lawmakers and competition authorities that creates challenges. Legal scholar Jasper van den Boom explored new methods to regulate digital markets by taking the perspective that these markets are a network industry. Combining insights from economics and business sciences with insights from the regulation of the networked telecommunications industry, he developed a new way of regulating: progressive ecosystem regulation.
In his dissertation, Van den Boom first shows why digital platform markets with platforms such as Google's search engines, Meta's social media and Amazon's Marketplace often exhibit monopolies. He developed a theory for the "digital natural monopoly," which explains why platform markets are often highly concentrated.
He then shows that firms with a monopoly in a platform market still feel competitive pressure due to the nature of the digital network. To this end, he developed a conceptual model for competition between ecosystems composed of groups of actors or products. Digital companies compete to capture a share of the digital network so that they can then exercise control there. A strong position in one or more platform markets can be used to strengthen one's position in ecosystem competition. Van den Boom's theory helps explain when ecosystem competition is healthy and when anti-competitive behavior is exhibited.
Based on these insights, the doctoral student proposes a system of "progressive ecosystem regulation. The purpose of these regulations is to protect new market entrants from competition from large digital ecosystems. The regulations are divided into three layers: heavily regulated, lightly regulated and protected. The tiered structure allows lawmakers to quickly adjust regulations as market realities change. With this proposal, the thesis challenges our existing ideas about regulation and develops a new paradigm for the deployment of regulation in digital markets.
