The Digital Economy

Competition and the digital market

Andrea Giuricin / Apr 2014

Jean-Claude Juncker, EPP candidate for the presidency of the European Commission. Photo: European Union 2014

Anytime we connect people, it drives commerce. We have seen the results following the development of railroads, highways and now with the Internet. The mobile Internet has helped launch new industries and changed existing ones from media to health care.

The digital market is more competitive than ever. We are connecting nearly everything to the Internet and the telecom sector is at the very centre of this expansion. But to deliver the full benefits of an Internet economy, we must be able to tackle the challenges that face it.

Flexibility, the fundamental element in this growing market, is essential.

From a regulation point of view, authorities will have to understand – and encourage – a single digital market. As Jean Claude Juncker, EPP Candidate for the next President of the European Commission mentioned last week during his visit to Finland: “A first thing we should do is rethink the application of our competition rules in digital markets.” It’s difficult for any company – small or large, new or established – to be successful in a market with fragmented regulation. One of the biggest deterrents to investment and innovation for telecom companies is inconsistent or unnecessary laws among different countries that create inefficiencies and prevent economies of scale. Technology changes too rapidly. Without future-focused regulatory models, countries will be left behind in a global marketplace.

Mergers will play an important role to enable telecom companies to compete. Costs are declining gradually but at the same time the sector needs bigger investment in infrastructure. Market consolidation will help with economies of scale and benefit the consumer. Regulators should remain open to these efforts.

Access to data will be crucial. To enable a world of anywhere, anytime connectivity, data will need to flow across national borders. Data is the lifeblood of international commerce. Interoperable policies across countries and regions will help enable the flow of information from point A to point B which is essential for any business hoping to expand globally.

The opportunities provided by mobilizing everything, are limitless. A global digital market will lead to greater synthesis. Regulators need to foster vertical integration among players in the market and horizontal integration, in particular geographies so as to reduce fragmentation.

The digital market is already global but regulation needs to move beyond local barriers.

Andrea Giuricin

Andrea Giuricin

April 2014

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