Competition Law Challenges of Blockchain Technology
Mariateresa Maggiolino, Bocconi University;
Laura Zoboli, University of Warsaw
-- The blockchain is one of the most discussed technologies of our time, and its relevance as a tool for economic transactions has been widely publicized. As for other disruptive technologies, it is essential to discuss the application of antitrust law to blockchain and to identify the most critical challenges. Our paper Antitrust Law and Blockchain(s): Preparing the Field addresses the possible interactions between blockchain technology and competition law, with the aim of understanding the potential relevance of blockchain technology to antitrust, while providing the reader with a toolkit for addressing the main blockchain scenarios through the lens of competition law.
In doing so, the paper considers the different challenges that arise whether we regard blockchain as either (i) a technology or technological output, or (ii) a technological tool, i.e. a place (or places) where other products and services may be distributed.
In the first scenario, blockchain as an output, the paper addresses three questions, namely whether the processes by which the technology is produced are in any way anti-competitive; whether there are other technologies that can meet the same need, being - as a consequence - substitutable with the blockchain within the same relevant market. It also addresses how many firms compete with each other in the production of such technologies, so as to appreciate their market power. In working out the answers, we elaborate that the technology is not anti-competitive by itself, but it could become a tool for anti-competitive actions. For example, it is possible to create a cartel by exchanging information on a particular market through blockchain technology. In this case, the technology is only a means to an end, whereas the illegal behaviour consists in the exchange of anti-competitive information.
In the second scenario, that of blockchain as a place for distributing products and services, the paper discusses two different competition issues. Both relate to the information that is stored on the blockchain and, in particular, the first concerns its possible markets, while the second deals with anti-competitive practices involving this type of information.
After having assessed the specific challenges raised by the blockchain, we argue that there is no need for amending the antitrust law to address them. Or rather, we do not consider it necessary to develop new ad hoc tools for blockchain technology, from a competition law perspective.
First, the categories already developed by the antitrust authorities seem well suited to innovative technologies such as blockchain.
Second, blockchain appears to be a long way from becoming a dominant technology and, even if it were, it could hardly be argued that a single player is managing it. Indeed, the fact that it is managed and validated by many players makes individual dominance very unlikely and, in any case, the collective nature of blockchain operations tends to favour the interests of the many rather than those of a single player, particularly in the case of public or open blockchains.
Third, this technology could increase the effectiveness of collusion and exchanges of information, by making them more precise and more difficult to identify. However, the unlawfulness of such behaviours remains the same as that of collusion and exchange of information by other means.
Therefore, we concede that the enforcement of antitrust in the blockchain scenario could face new difficulties. However, rather than retracing the source of these challenges to a lack of power on part of the competition authorities – which already have all the formal authority they need – we should instead look at the complexities they face when dealing with the blockchain, which may require specific technical expertise.