Furman Report recommends unlocking digital competition

By | March 18, 2019

Commissioned by the UK government, the recently published Furman Review calls for unlocking digital competition.

Ever feel frustrated by the stranglehold that Google, Facebook, Amazon, and other major players have on the online market? This lack of choice and competition is exactly what the report attempts to address.

Most importantly, it proposes creating a ‘digital markets unit’, to be responsible for competition, innovation, and consumer and business benefits. This unit should pursue open data, data portability and creating a code of conduct.

Personally, I think that a lot of the success or failure of such a recommendation – if it is followed through with – would hang on how ‘strategic markets’ are defined. If the strategic market definitions don’t align with the digital stranglehold business positions, then any resulting measures won’t affect their business model much, nor will they have much impact. However, if they do line up and if the resulting measures are good ones, we have the potential to see more competition and more choice on the market, allowing new businesses to innovate and compete alongside the major players.

For example, take a look at the German eBook market. There are currently two major competitors, Amazon and the Tolino alliance. Amazon has a strategic market position and has positioned the Kindle as a proprietary eReader device that supports a proprietary digital content format that works exclusively with Kindle. The Tolino alliance also has a strategic market position, and has positioned the Tolino as an eReader device that supports digital content from any of the companies in the alliance as well as ePub materials from outside of the alliance, allowing you to aggregate eBooks purchased from a number of different sellers with a single Tolino cloud identity and synchronizing them with your eReader, regardless of which seller you bought them from. This latter model is a fairly good first attempt at what might be possible for other digital markets under a well-designed and implemented recommendation: multiple vendors sharing an interconnected digital delivery infrastructure, much in the way that multiple mobile connection companies share common network infrastructure.

Whereas I support the general direction of the recommendation, because I believe that this vision is one that leads to long-term choice, innovation, and acceptance, I also take the review with a grain of salt. For example, the recommendations also calls for fast arbitration in case of disputes – a solution that has limitations when it comes to meting out justice. The review is also a UK review, and especially with Brexit just around the corner, it is not likely that the UK market alone is large enough to cause traction that will change the landscape of digital competition.

It will certainly be interesting to see what, if any, changes result from the report – though if the CMA’s recommendation, which goes along very similar lines, is any indication of support for the recommendations in the Furman Review, casts a ray of hope for a brighter digital future.

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