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ACM: the digital revolution offers both risks and opportunities

11-04-2018

The Netherlands Authority for Consumers and Markets (ACM) has made the digital economy one of its top priorities for 2018 and 2019. In its annual publication called InSight, which is presented to lawmakers, ACM outlines several consequences of the rapid digitalization of markets for ACM's regulatory efforts. Digitalization offers great opportunities and benefits for consumers and businesses. However, there are also risks of abuses of market power or potentially negative effects brought on by sophisticated software used on websites. ACM calls on lawmakers to think about new frameworks for these rapid developments.

Risks

In this year’s edition of InSight, ACM gives attention to, among other subjects, the risks of the emergence of abuse of market power in digital markets. Companies in the digital economy are able to become very large very quickly. That is why ACM proposes to have the balance between ex ante regulation and ex post regulation evaluated. In addition, there are risks, because the software used on websites (i.e. the algorithms) is, for the most part, not transparent. For instance, self-learning algorithms could collude and form cartels with each other. ACM also sees risks when, based on data collected on them, consumers are each presented with a different selection or price than are other consumers. Whether or not this is a desirable situation is a political assessment.

Opportunities

ACM sees opportunities in taking advantage of valuable data from companies. That would allow companies that are currently on the sidelines to develop innovative services. ACM recommends first taking stock broadly of whether such valuable data exist. The next step is considering whether companies are able to share data voluntarily or whether it is better to require them to do so. Capitalizing on the many opportunities that digitalization presents calls for a careful assessment of all interests, which can have different outcomes for individual applications or sectors.

InSight

‘InSight’ is an annual publication of ACM’s in which it presents its view on current trends and developments. With this publication, ACM wishes to spur lawmakers to think about the risks and opportunities that ACM sees.

 

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