Interview: Tech & Competition - A Conversation with Professor Philip Marsden

Interview   –   5 June 2020

Professor Philip Marsden is a Professor of Law & Economics at the College of Europe, Deputy Chair of the Bank of England’s Enforcement Decision Making Committee and a member of both the Regulatory Decisions and Case Decisions Committees of the Financial Conduct Authority and the Payment Systems Regulator. He was appointed by the Chancellor to the Treasury’s Digital Competition Experts Panel, which produced the ‘Furman Review: Unlocking Digital Competition’.

Professor Marsden is an authority on competition law and recently debated at the United Nations the role competition authorities and governments worldwide can play in navigating online harms and competition problems, in particular when dealing with the tech giants such as Google or Facebook. We sat down with Professor Marsden to further explore these themes.

 

MSL: Thank you for joining us Professor Marsden. When discussions are had about how to explore and improve our relationships with the world’s biggest digital platforms, people very rarely think about competition authorities and the role they can play. What makes competition authorities important in this discussion?

Philip Marsden: The more political concerns about losses of privacy, online harms, abuse of democratic processes and misuse of data are real for any digital platform, but they have the largest effects when platforms have market power – and it is then that competition authorities have the clearest role. Competition authorities are usually concerned about economic harms, relating to exploitative pricing or exclusion and discrimination. Those harms are also being alleged of tech platforms. To a large extent, competition authorities have the investigative, analytical and enforcement tools to address such abuses of market power, and this makes competition authorities highly relevant in a government's approach to curbing these and other online harms.  

MSL: How can competition authorities and governments nurture the growth and innovation instincts of digital platforms, and still make sure they act in the best interests of the consumers they work for?

PM: Competition authorities are concerned about making markets work well for consumers and businesses and make great efforts to understand the innovations and efficiencies that growing businesses can bring, while still protecting other market players and consumers from harm. Competition authorities do not try to take the crown from a victor in any competition on the merits – but try to stamp out illegal behaviour so that legitimate competition and innovation can thrive.  

MSL: A common complaint from digital platforms is that increased oversight inevitably means less freedom, which would then lead to stunted growth and innovation. How would you approach this line of thinking?

PM: While we increasingly see the world through the eyes of digital platforms, whether it is through their screens or the algorithms that determine what we see, they are also watching and learning from us, largely to our benefit as well, in terms of more targeted advertising and product placement. However, we don't live in their world, they live in ours and as such the platforms have to accept some degree of regulatory oversight to ensure the safety of our children, for example, or the ability of other market participants to compete with the platforms. That scrutiny should not stunt their innovations but instead provide a safe space within which they can thrive.

MSL: Many authorities believe that tech moves too quickly to be effectively enforced. However, you counter that many of the practices of the tech giants are very recognisable and that we mostly have the legal framework to deal with this. What would you like to see from enforcement to make sure they are ahead of the curve when dealing with tech?

PM:  Most of the behaviour that we have seen from tech platforms that violates competition law is very familiar to us: it involves exploiting the weak through excessive data collection or rent extraction, excluding competitors from platforms, or biasing search results to favour one's own offering. There is clear competition law precedent to address these issues. However, one enormous problem is that such investigations take a long time. When we are addressing new harms, taking our time is appropriate as authorities have to be careful not to scare the horses. But when we are dealing with well-recognised harms, then there is a strong argument for new speedier processes, so authorities can at least address online harms in real time, and not years afterwards.

MSL: Finally, digital platforms are here to stay. What is your vision of a well-regulated, competitive digital platform market look like?

PM: What I'd like to do is speed up enforcement and not only catch up with tech platforms but get ahead of the problems. One vision for this is a set of clear rules of the road, so that the platforms can see what is prohibited and commit to avoid certain harmful acts. This requires moving part of our enforcement structure from ex post (after the fact) investigations to ex ante (beforehand) clear rules and prohibitions, with very fast enforcement for breaches. This would help the platforms police themselves and avoid some harms, and help authorities correct clear breaches a lot faster.   

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