UNCTAD eWeek - Better governance for fairer digital markets: Unlocking the innovation potential and leveling the playing field: Opening remarks

Excellencies,

Distinguished Speakers,

Ladies and Gentlemen,

I warmly welcome you to this session which addresses a crucial aspect of the modern digital economy: The dominance of a few digital giants and the role of governance to ensure fair and innovative digital markets.

The digital economy is driven by the growing role of data and the growing importance of digital platforms. Network effects, access to data, and economies of scale and scope have led to monopolistic trends, resulting in significant market power of the world's largest digital platforms. The consolidation of market and technological power, alongside control over vast data resources, has far-reaching policy implications for competition, data, trade and taxation.

These platforms, primarily based in the United States and China, have reinforced their positions through strategic acquisitions, expansion into new sectors, lobbying and partnerships with traditional sectors. For instance, Apple, Google, Microsoft, Facebook (now Meta), and Amazon accounted for one quarter of all mergers and acquisitions in the AI segment from January 2016 to January 2021, totaling 28.4 billion US dollars in value. Global platforms invest strategically across the entire data value chain, from data collection and transmission to storage and analysis using AI.

Let me give you some numbers that capture the predominance of the United States and China in the digital economy: The two countries account for half of the world’s hyperscale data centers; they have the highest rates of 5G adoption; they have attracted 94 per cent of AI start-up funding in the past five years, and 70 per cent of the top AI researchers.

Moreover, the combined share of five major platforms in global digital advertising revenue now is about 70 per cent.

In this session, we will listen to two leaders of digital platforms that can be seen as competitors to the largest players in their respective segments. They are taking a different route to the market by applying alternative business models. I am looking forward to hearing their perspectives on what could be done to ensure a more level playing field.

 

Ladies and gentlemen,

Challenges for creating fairer digital markets are multifaceted. They encompass issues of data privacy, political influence, and the need to foster an environment where innovation can thrive without being stifled by market dominance. There is a delicate balance between regulation and innovation. We must ensure that governance mechanisms are robust enough to protect consumers and smaller market players while fostering an environment conducive to technological advancement and competition.

Actually, competition policy has gained particular importance in addressing the role of major digital platforms. Its focus has expanded beyond traditional consumer harm measures like price increases. It now encompasses data protection and privacy concerns.

This change has led to more jurisdictions adopting data protection laws, and calls also for collaboration between competition and data protection authorities.

In recent years, various jurisdictions have initiated policy and legislative efforts to create a more equitable digital playing field. For example, the European Union's Digital Services Act and Digital Markets Act of 2022 aim at regulating the market power of tech giants. Similar legislative efforts are under discussion in the United States, the United Kingdom, and in some developing countries.

As digital platforms are global, international cooperation in competition law enforcement is needed, particularly for developing countries. These countries could benefit from engaging in joint actions within regional frameworks and improving policies to combat anti-competitive behavior. This involves law enforcement, regulation and soft law instruments, alongside regional and international efforts to share information and responses.

Before ending, let me reemphasize that the role of governance in the digital economy cannot be overstated. We need better governance for shaping a digital future that is equitable, innovative, and beneficial for all.

I look forward to insightful discussions and hearing about your guidance on actionable solutions.

Thank you.