PROBLEMS OF MONOPOLIZATION AND ANTITRUST REGULATION IN THE MARKET OF INFORMATION SERVICES AND SOCIAL NETWORKS

Author
, assistant lecturer, Kharkiv, Pushinska, 77

In heading

 Law;

Signed print

 26.02.2018

Issues number

 2018 - № 1 (32)

Page

 162-175

Type of articles

 Scientific article

Code UDK

 346.242:004.9

ISSN print

 2411-5584

Abstract

 Problem setting. Under globalization of the information services market, the society faces a number of goals, which are to be accomplished for functioning of this market within the legal field. The lack of regulatory frameworks of a competitive interaction in this area is one of central problems. Emergence of such gap is caused by specificity of this market and relations arising within the market. These factors lead to inadequacy of legislative categories. Nowadays, none of normative acts (neither an international act nor national one) properly determines an exhaustive list of features of the «monopoly position in the information services market». Hence, it is impossible to clearly delineate the abuse of monopoly power. The author raises a number of questions: What territories does the market
encompass? Is it possible to indicate the «national» market? Can governmental officials apply the same statements of the competitive law and measures regarding prevention and putting an end to such violations in the sphere of competition to entities supplying information technologies as those applied to ordinary «classic» entities? What are ways for overcoming this problem? Is it possible to accept a unified international act, which would regulate these issues or to create the competent international supervisory authority?
Analysis of recent research and publications. Some scientists such as Katsiaryna S. Baran, Kaja J. Fietkiewicz, Wolfgang G. Stock, F. Linde, W. G. Stock, R. H. Weber, A. Nadkarni, S. G. Hofmannта, etc. have conducted researches in the field of monopolies in markets of information services.
Paper objective. The article objectives are as follows: to consider the current state of the global market of information products in the context of maintaining the regime of economic competition; to consider information infrastructure and tradable information products as well as spheres and sub-spheres of functioning of this market; to analyze an opportunity of supervision and antitrust regulation of this sphere.
The main material presentation. Summarizing the outcome of the second decade of the twenty first century, it is worth mentioning that the Internet as a phenomenon has integrated into all spheres of life. The Internet has brought with it a large amount of processes, which are improperly regulated by the current legislative statements due to their novelty. This article is dedicated to markets of information products and their infrastructure, which have varieties and different orientation of functioning.
Extremely dynamic development is inherent to the information services market. For the last few years, the market has transformed from an undetermined «quasi-market» environment to a classic market acquiring a considerable number of respective features. Particularly, there is a tendency to monopolization.
The information infrastructure includes sectors and sub-sectors, various directions of information services and products at the global level as well as at the local level of a certain country. Considering any direction, scientists may indicate monopolists in one or another sphere. Therefore, the author cannot state that there is the significant level of market power.Monopolization processes, especially on an international scale, always pose a danger.
Conclusions. Analyzing the current state of legislative basis, which regulates competition in these markets, the author may draw the following conclusions:
a) since the market of information services is an extremely specific sector, it requires specific regulation;
b) these peculiarities are related to a non-typical subject to legal relationships. Both information and information services should not be considered as a classic market of goods and services;
c) certainly, there is the lack of legislative frameworks in the field of overcoming monopolization of the market of information products and services at the moment. Classic legal methods of the influence and supervision (control over re-organizing enterprises and import-export operations, licensing of certain types of activities, anti-dumping measures) mainly aim at regulation of «classic» markets, sectors of production and distribution of goods and services. Therefore, these methods of antitrust regulation turn out to be nearly unviable with regard to regulation of the information services market;
d) having considered specificity of these markets, the author determines several facts: firstly, it is impossible to properly delineate scopes, within which one or another information service company operates, because national monopolies do not affect this sphere; secondly, indication of trade scopes is very complicated because sometimes these scopes cannot be identified in any way; thirdly, classic dimensions of the market also include a timeframe, which accounts for one year. The scientists can also apply specific methods for determination of a timeframe of the market of information infrastructure;
e) moreover, the question regarding more adequate legal regulation of this sphere remains unanswered. Obviously, the European Economic Area Agreement and the Treaty Establishing the European Economic Community, which have been considered as instruments of legal regulation in this article, are not optimal. In the process of protection of own rights, an aggrieved party faces a set of difficulties referring these legislative acts. Frequently, such process does not produce necessary results;
f) a fact of indifferent attitude of violators is one more disadvantage in the competitive legislation (unfortunately, it is inherent not only to the information services market). In practice, almost every monopolist (the article contains a set of examples related to Google Inc.) is willing to bear sanctions regularly, continuing to abuse antitrust legislation. The problem is concerned with insufficient efficiency of a system of preventing measures, which most frequently imply a simple fine;
g) a majority of these problems are caused by the extremely outdated legal frameworks, which establishes the basis of legislative regulation. All the acts used for elimination of unfair competition in markets of information services have been accepted in the middle of the twentieth century. It is an obvious fact that relations, which are subject to examination in this article, have not existed at that time. This legislation is not appropriate for regulation of the relations concerned with monopolies in the market of information services;
h) returning to the question of prospects for improvement of statements of legislative acts regulating antitrust measures in this sphere, the author summarizes that formation of a particular international body, which would develop the unified legislative basis, is the most effective step. Lawyers together with specialists in information technologies should have a consultative role at such institution.
Short Abstract for an article
Abstract. The article is dedicated to examination of the state of markets of social media and other information services under globalization. The necessity of consideration of a problem related to monopolization of the mentioned markets and the lack of regulatory frameworks of the world monopolies of information infrastructure is all-too-obvious. It is important to determine scopes and margins of regulation of these markets, forms of the abuse of market power on the part of monopolies and the legislative basis at the supranational level.

Keywords

 antitrust legislation, market monopolization, monopolies, antitrust regulation, social networks, information services, social media, information infrastructure.

Reviewer

External reviewer

Article in PDF

 1 162-175

Bibliography

 1. Katsiaryna, S. Baran, Kaja, J. Fietkiewicz, & Wolfgang G. Stock (2015). Monopolies on Social Network Services (SNS) Markets and Competition Law. In Inventing Information Science in the Networked Society: Proceedings of the 14th International Symposium on Information Science. Glückstadt: Verlag Werner Hülsbusch, 5. Pp. 424–436.
2. Linde, F., & Stock, W. G. (2011). Information Markets. A Strategic Guideline for the I–Commerce. Berlin, Germany, New York, NY: De Gruyter Saur.
3. Weber, R. H. (2013). Competition law issues in the online world. In 20th St.Gallen International Competition Law Forum (ICF). Retrieved from https://www.bratschi.ch/fileadmin/daten/dokumente/publikation/2013/04_April/SSRN-id2341978.pdf.
4. Nadkarni, A., & Hofmann, S. G. (2012). Why do people use Facebook? Personality and Individual Differences, 52 (3), 243–249.
5. Sluzhba obminu zobrazhenniamy Flickr [Flickr image sharing service]. (n.d.). Retrieved December 15, 2017, from https://www.flickr.com/9.
6. Sluzhba obminu video YouTube [YouTube video sharing service]. (n.d.). Retrieved December 15, 2017, from http://www.youtube.com/.
7. Sluzhba sotsialnykh zakladok Delicious [Delicious social bookmarking service]. (n.d.). Retrieved December 15, 2017, from https://delicious.com/9.
8. Baza znan Wikipedia [Wikipedia knowledge base]. (n.d.). Retrieved December 15, 2017, from https://www.wikipedia.org/9.
9. Mikrobloh sotsialnykh merezh Twitter [Twitter social network microblogging]. (n.d.). Retrieved December 15, 2017, from https://twitter.com/.
10. Sotsialna merezha Facebook [Social network Facebook]. (n.d.). Retrieved December 15, 2017, from https://www.facebook.com/9.
11. Sotsialna merezha Renren [Social network Renren]. (n.d.). Retrieved December 15, 2017 from http://www.renren-inc.com/zh/9.
12. Sotsialna merezha VKontakti [Social network VKontakte]. (n.d.). Retrieved December 15, 2017, from https://vk.com/.
13. Poshukova systema Google [Search engine Google]. (n.d.). Retrieved December 15, 2017, from https://www.google.com/.
14. Auktsionna platforma eBay [Auction platform eBay]. (n.d.). Retrieved December 15, 2017, from http://www.ebay.com/.
15. Internet-servis dlia prodazhu onlain-knyzhok Amazon [Internet service for the sale of Amazon online books]. (n.d.). Retrieved December 15, 2017, from http://www.amazon.com/.
16. Consolidated version of the Treaty on European Union and the Treaty on the Functioning of the European Union (2012, October 26). Official Journal of the European Union C 326, 0001–0390. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A12012E%2FTXT.
17. Rehlament 19/65/IeES vid 02.03.1965 shchodo zastosuvannia zastosuvannia statti 85 (3) Dohovoru do okremykh katehorii uhod ta uzghodzhenykh dii [Regulation No 19/65/ EEC of 2 March of the Council on application of Article 85 (3) of the Treaty to certain categories of agreements and concerted practices]. (1965, March 06). Official Journal, 036, 533–535. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1521097834510&uri=CELEX:31965R0019.
18. Rehlament Rady (IeES) 4064/89 vid 21.12.1989 shchodo kontroliu za kontsentratsiiamy subiektiv hospodariuvannia [Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings]. (1989, December 30). Official Journal, L 395, 1–12. Retrieved from http://eur-lex.europa.eu/legal-content/GA/ALL/?uri=CELEX:31989R4064.
19. European Commission (2017, June 27). Antitrust: Commission fines Google €2.42 billion for abusing dominance as search engine by giving illegal advantage to own comparison shopping service. Retrieved from http://europa.eu/rapid/press-release_IP-17-1784_en.htm.

Code DOI

 10.31359/2411-5584-2018-32-1-162

16.02.2018