On 27 October 2015, the Competition and Markets Authority (CMA) published a speech by its Chief Executive, Alex Chisholm, on online platform regulation and the challenges of evolving tools and practices to meet the challenges of the digital economy.

In his speech, Mr Chisholm considers the role to be played by anti-trust law and sector specific legislation and the need for regulators, policymakers, businesses and consumers to adapt their practices to harvest the benefits of the digital economy, while containing its costs and risks.

The speech focuses on three general points:

1. Blanket solutions should be avoided

Online platforms are diverse and have different characteristics which will give rise to different issues. Regulation should, therefore, remain case-specific if the risk of applying the wrong rule to a novel situation is to be minimised.

2. Shifting emphasis of regulation from ex ante to ex post

In terms of the timing of any intervention, Mr Chisholm sees three types of risks:

  • Acting prematurely. Premature ex ante regulation can impose substantial direct compliance costs and reduce competition.
  • Ex ante regulation, if applied too early, can inhibit innovators, thus ossifying evolving market structures.
  • Acting too late.

3. Evolving the ex post enforcement toolkit

In order for regulators, policymakers, businesses and consumers to realise the benefits of the evolving digital space, they will need to adapt their practices in a collective effort to ensure the challenges brought by online platforms are addressed effectively.  Amongst other things, businesses would do well to improve the transparency of information available on how they operate and take more responsibility for satisfying consumers that their legitimate concerns about privacy and data protection are fully respected.