Interoperability as a tool for competition regulation

Paper by Ian Brown: “Interoperability is a technical mechanism for computing systems to work together – even if they are from competing firms. An interoperability requirement for large online platforms has been suggested by the European Commission as one ex ante (up-front rule) mechanism in its proposed Digital Markets Act (DMA), as a way to encourage competition. The policy goal is to increase choice and quality for users, and the ability of competitors to succeed with better services. The application would be to the largest online platforms, such as Facebook, Google, Amazon, smartphone operating systems (e.g. Android/iOS), and their ancillary services, such as payment and app stores.

This report analyses up-front interoperability requirements as a pro-competition policy tool for regulating large online platforms, exploring the economic and social rationales and possible regulatory mechanisms. It is based on a synthesis of recent comprehensive policy re-views of digital competition in major industrialised economies, and related academic literature, focusing on areas of emerging consensus while noting important disagreements. It draws particularly on the Vestager, Furman and Stigler reviews, and the UK Competition and Markets Authority’s study on online platforms and digital advertising. It also draws on interviews with software developers, platform operators, government officials, and civil society experts working in this field….(More)”.