According to a new report from the Swedish Competition Authority, there are a number of potential competition problems on digital markets in Sweden. The inquiry reveals major differences between the various digital markets, meaning that the potential risks also vary. The results presented in the report also reveal a number of shortcomings in current competition rules.
In the report Competition on Digital Platform Markets in Sweden, the Swedish Competition Authority notes that, while digitisation has had many benefits, it has also created challenges, not least in the field of competition.
“There is a risk that established digital platforms will behave in a manner that prevents alternative solutions from emerging. This may lead to weaker competition to the long-term detriment of consumers,” says Rikard Jermsten, Director General of the Swedish Competition Authority.
The Swedish Competition Authority’s report is based on studies of 16 different digital platforms, including CDON, Tradera, Storytel and Foodora, as well as Apple, Google and Facebook. The inquiry reveals major differences between the various platforms and platform markets. For this reason, potential risks vary from one digital market to the next.
In line with the findings of other international expert panels and competition authorities, one of the competition problems identified is that platforms may have a strong incentive to prevent users from changing to a competing supplier. This risks creating a situation in which alternatives find it so difficult to establish themselves that any meaningful competition ceases.
At the same time, individual companies are becoming increasingly dependent on platforms to reach their customers. This provides platforms with significant opportunities to dictate terms to the company. This may, for example, occur through a platform favouring itself or choosing not to share important customer data.
The emergence of digital platform markets has highlighted a number of significant shortcomings in current competition rules. The need for new rules has been under discussion for several years and the European Commission recently proposed EU-wide legislation to regulate certain platforms that act as gatekeepers.
“Based on the inquiry undertaken by the Swedish Competition Authority, there is reason to examine what further rules are required to deal with competition problems at a Swedish level,” says Rikard Jermsten.
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