October 20, 2016

GSMA Report Proposes New Thinking on How Competition Policy Applies to the Digital Economy

Brussels: The GSMA today launched the report “ Resetting Competition Policy Frameworks for the Digital Ecosystem” . The global study, prepared for the GSMA by Competition Economists Group, provides a detailed analysis of the current principles and processes that govern today’s digital markets, and argues that policy makers should review and update their competition and regulatory frameworks to create an environment that will facilitate long-term, sustainable competition and encourage innovation.

“The global economy is undergoing a major transformation, and the rapid take-up of technologies including mobile communications, digital platforms, big data, cloud computing and social media are changing the nature of the products and services, and the ways people interact,” said Mats Granryd, Director General, GSMA. “This transformation is disrupting existing business models and industries, while offering substantial potential to enrich lives and raise living standards for citizens around the world.”

Highlighting the versatility of competition law, the report outlines a number of recommendations for policy makers:

• The control of data can confer a competitive advantage and should be considered in competitive assessments;
• Price is not the only important factor in digital markets, and therefore market assessments should take a broader view;
• Market assessments, including merger reviews, should fully consider the dynamic effects and efficiencies that positively impact investments, quality of service and performance; and
• Better balance is required between sector regulation and competition law, with the latter augmented by better procedures and faster decision making.

This study comes at a time when the debate over the future of the regulatory framework in Europe moves from principles to concrete approaches and policy instruments. It recommends specific approaches that would promote investments, innovation and better outcomes for consumers across region. The report was presented to European Commissioner for Competition Margrethe Vestager in a meeting with the GSMA and leaders of companies from across the European mobile industry.

“Competition policy in Europe is based on sound principles that have been effective for many years,” continued Granryd. “However, the evolution of the digital economy has created new dynamics that require a reset of some elements. Action in these areas will ensure a sound basis for ongoing competition, investment and innovation to the benefit of European consumers.”

The report is available for download at http://www.gsma.com/publicpolicy/resetting-competition-policy-frameworks-for-the-digital-ecosystem.