Toward a Coherent Approach to Market Power in the Digital Sector: Complexity, Growth through Acquisition, and Remedies

Abstract

The Digital Business Ecosystem (DBE) model far surpasses other models and structures in its scope, scale, and complexity. DBEs feature unique economic, technological, business, and growth characteristics that increase their opacity to consumers, competition enforcers, and lawmakers. These include a range of market failures, the role of cloud computing in realizing the DBE value proposition, and growth through acquisition.The United States is making slow progress in addressing competition concerns in the digital sector. Legislative initiatives remain focused on the largest players, and there is little political appetite for a dedicated sector regulator to develop a system of non-discrimination “access” regulation. This article discusses the implications of the widening gap between the complexity and growth of DBEs, and policy responses to the market power problems they raise. The analysis recommends a more coherent approach centered on identifying policy tools—including antitrust, regulation, and privacy law—that are best suited to addressing the unique features of DBEs and that work in a complementary way.