International Law
Ebrahim Rahbari
Abstract
IntroductionThe development of digital markets and the increasing importance of big data has brought new challenges in the concept of abuse of dominant position. In platform markets, the entry barriers and the presence of big tech giants (gatekeepers) who have taken over the market by employing big ...
Read More
IntroductionThe development of digital markets and the increasing importance of big data has brought new challenges in the concept of abuse of dominant position. In platform markets, the entry barriers and the presence of big tech giants (gatekeepers) who have taken over the market by employing big data, make it difficult for newcomers to enter the market and there is a good opportunity for big data companies to abuse their dominant position and commit anti-competitive practices, all of which brings new issues to antitrust law.It is clear that we can apply general rules on the abuse of dominant positions and monopolizing in the big data field. This article clarifies how abusive behaviors such as unilateral refusal to share necessary big data or restricting access to it can disrupt competition in downstream or adjacent markets and also, how deceptive practices of platforms in collecting data have gradually surfaced in the realm of competition law. This research also analyzes price discrimination and predatory pricing by using big data and the challenging issue of entering other markets by leveraging big data. Literature ReviewThere are no studies in Iranian legal literature that discuss different aspects of the abuse of dominant position by use of big data. Viewing the challenges from the perspective of Iranian Competition Law, the current research analyzes the issues and provides some particular solutions for the first time. MethodologyThe method of this research is descriptive-analytical done by a comparative approach. ResultsGenerally, refusing to share or restricting access to big data may be considered an abuse of one’s dominant position under certain circumstances. Various factors should be considered such as whether the data is first-second- or third-party, alternative sources to access the big data, the effect of the refusal or the restriction on competition in the related markets, the process of providing new products and services, and the incentives for innovation and investment.Recent approaches to the deceptive collection of data indicate the significance of competitive and economic dimensions of personal data. Since solutions outside the realm of antitrust law are not sufficient to regulate and protect these data, employing decisive remedies of competition law seems justified.Regarding abuse of pricing powers, if price discrimination among users is done by collecting and analyzing big data and tracking and discovering their preferences, and leads to a reduction in the price of products or services and brings real and long-term efficiency, it would be desirable from the perspective of competition law. However, it should be noted that if this arrangement becomes an abusive behavior to restrict the competition for other companies or lay the groundwork for predatory pricing in the future, in such a way that other competitors lose their ability to compete, antitrust law should intervene to prevent this abuse of big data.In addition, platforms are not allowed to abuse the big data that they gather in their system to facilitating the way for themselves or their partners and their related companies to improperly penetrate adjacent or vertical markets at the expense of weakening competitors. Also, tying any kind of products or services to data that the applicants do not need between which no reasonable linkage can be imagined is an example of improper tying arrangements and abuse of a dominant position, which is condemned in antitrust law. In fact, self-preferencing by using data is in itself contrary to competition law norms if it results in a significant disruption of competition. ConclusionIn the Iranian competition law, although the existing general rules and regulations may be effective to a relatively small extent when facing abuse of a dominant position by way of big data, one cannot ignore the shortcomings and inefficiency of these legal frameworks and the necessity to adopt new competition strategies in the light of the diverse aspects of digital markets and as the rising importance of big data. Although some new approaches taken in the Strategic Plan Of the Islamic Republic of Iran in Cyber Space can be seen, those policies and solutions are not in line with competition law standards, the requirements of Iran's digital markets and the big data challenges, and the proposed views lack the necessary legal-technical justification.In fact, the aforementioned document has failed to codify the fundamental principles of competition law in platform markets by not setting the basic foundation and taking the initial steps in the right direction. It points to modern approaches to competition law, controversial in matters which legal systems are dealing with in academic and judicial circles. Despite these considerations, it seems that, especially in Iran, in the absence of an effective competition system and strong monitoring arrangements on the practices of companies, platforms with a dominant position have a real chance to abuse big data, and so, it is incumbent to take stronger measures and remedies to regulate and inspect the behaviors of companies while respecting the fundamental principles and standards of antitrust law.
Public Law
Mohammad Sadegh Farahani; Abasali Kadkhodaei; Vali Rostami
Abstract
1. IntroductionThe expansion of the Internet and its ever-increasing rate along with the rise of smart mobile phones have made Internet-based businesses one of the inseparable sectors of today's economy. The part that this type of business plays in today’s world economy is so much that now the ...
Read More
1. IntroductionThe expansion of the Internet and its ever-increasing rate along with the rise of smart mobile phones have made Internet-based businesses one of the inseparable sectors of today's economy. The part that this type of business plays in today’s world economy is so much that now the top companies in the world, in terms of capital and market value, are companies in the field of digital economy. This is a reality that Iran will also face in the not-too-distant future; then, companies in the field of digital economy will take a significant share of the market. So, today, it is especially necessary to pay attention to the issue of competition in digital platforms and to set the appropriate rules to govern them. Literature ReviewUntil the writing of this article, most of the issues raised in Iran's competition law are devoted to the examination of rules governing competition in traditional markets. Only one article titled "Competition Council and Internet Businesses" by Zarei et al. (2019) has been written in relation to platform markets, and this work is also based on the traditional rules of competition law and regardless of the specific challenges of this field. Analysis of the vote number 306 of the Competition Council. Therefore, it can be claimed that the explanation of the characteristics and challenges of platform markets and its effect on the regulation of competition in this field, which is examined in this article, qualifies as innovation. MethodologyIn order to correctly set the new rules applicable in the field of digital platforms’ competition, it is necessary to go through a three-stage system: first, we must get a correct understanding of the prominent features of the digital platform markets that affect the issue of competition. In the second stage, the competitive challenges arising from these characteristics, with which the traditional rules are not able to fully deal, should be examined and evaluated; and finally, new rules of competition in the field of platform markets based on the aforementioned characteristics and challenges should be put in place.As the title of the article suggests, the purpose of this article is to explain and analyze the first and second stages of the aforementioned process to show the deficiency of traditional rules in response to the competitive challenges of the field of digital platforms and the necessity of revising them. For this purpose, after explaining the meaning of "platform" and its conceptual evolution over time (the first part), the prominent features of digital platforms that affect the issue of competition are counted, identified, and evaluated (the second part) and finally, the challenges due to the aforementioned characteristics and the inadequacy of the traditional rules in response to them will be explained (part three) to prove the necessity of revising the traditional rules of competition law in the field of platform markets. ConclusionBased on the findings of this article, the main economic features of digital platforms are such as "the network effect", "reduction of transaction costs", "replacement of ownership with access", "fragmentation of supply and demand", "economy of scale and economy of significant scope", "simultaneous improvement of economies of scale and personalization" and "fundamental importance of data". Although they are not entirely new and traces of them can be seen in traditional markets, their simultaneous presence in digital platforms makes the market tend towards them. In addition, this problem may be aggravated by the actions of digital platforms to strengthen and expand their position in the market. It is noteworthy that none of the aforementioned features that have led to the occurrence of the mentioned challenges have been recognized in the traditional rules of competition as an obstacle to entering the market or as an anti-competitive practice. Therefore, the first competitive challenge of platform markets, which requires the regulation of appropriate rules, is the growing monopoly of these markets. Naturally, the most suitable solution to get out of this situation is to recognize the aforementioned features as specific types of entry barriers for digital markets.It should also be kept in mind that the preliminary stages to apply anti-competitive rules and guaranteeing them in digital platform markets face serious challenges. In these markets, it is not possible to identify the product as easily as it is in traditional markets, and the application of the conventional SSNIP test cannot be applied to many platforms that offer zero-price services or two- or multi-modal platforms. This makes it a serious challenge to recognize the exact share of the platform in the market and, accordingly, to recognize the market power. It seems that the transition from "quantitative criteria" to "qualitative criteria" is the way out of such challenges.Also, following the traditional rules in recognizing the anti-competitive behavior of platforms, causes many platforms to be accused of aggressive pricing at the very beginning due to having zero marginal cost. In addition, the existence of the aforementioned features has facilitated the conditions for committing anti-competitive acts, such as establishing exclusive conditions in the transaction, selling a package of products, collusion, etc. It seems that the requirement to overcoming such challenges is to promote ex-ante regulations along with the implementation of the current (mostly a-posteriori) regulation model.Finally, it seems that the simultaneous presence of these features in digital platforms has largely led to the reemergence of traditional issues of competition law as current issues, and this will consequently require a review of competition laws in this area, as countries such as the United States, China, and the European Union have followed the same path.
