Fiona Scott Morton introduces her new book on how regulators and policymakers can promote competition and fairness in digital markets. You can download the book for free here.
Over the past 20 years, I have watched digital platforms transform our daily lives and our economy in ways few could have predicted. These global marketplaces, whether for apps, search, social networking, or commerce, have fueled innovation, created new businesses, and generated economic growth at an unprecedented scale. Yet the very forces that propelled their ascent—network effects, economies of scale, data-driven feedback loops, and tightly integrated ecosystems have also entrenched a small number of firms as indispensable gatekeepers. Today, a handful of platforms control how businesses reach consumers, how developers distribute their products, and even how information circulates.
In Digital Platform Regulation: Making Markets Work for People, I argue that antitrust enforcement alone is no longer sufficient to restore competition in these markets. A court is presented with one platform’s behavior that (typically) began a decade earlier and must fix the resulting monopoly on the first try. The court is constrained by the narrow scope of the individual case and lacks both the ongoing mandate and technical expertise of a sectoral regulator. Remedies imposed through litigation risk becoming obsolete as platforms continuously develop new business models and user interfaces. Instead, we need a framework of light-touch, pro-competitive regulation: one that combines clear, principle-based rules with the flexibility to adapt over time, all housed inside a specialist regulator.
The realization that this approach would be needed took shape in 2019, when three independent reports, commissioned by the European Commission, the United Kingdom, and the University of Chicago’s Stigler Center (which I chaired), each articulated concerns about the reduction in competition caused by Big Tech platforms, and suggested how antitrust enforcement could be modernized and adapted to combat it. However, traditional antitrust tools, although powerful, cannot fully address the moats that surround digital gatekeepers. A judge might prohibit a particular exclusionary contract or unwind a merger, but she cannot oversee a platform’s evolving technical architecture or its private data-sharing arrangements over the long term.
The instant reaction of economists to the word “regulation” is often that a government bureaucrat will fix prices, choose technology, and determine investment amounts (as happens with utilities like water and electricity). In digital technologies, innovation is critical, risk is high, intrusive regulation is likely to hold back innovation, and therefore, this traditional form of regulation is costly. Likewise, some sides of a digital platform do not pay for services with money but rather involve bartering for data or for attention spent watching advertisements, so price regulation isn’t a good fit either. This book explains why light-touch, pro-competitive digital platform regulation is effective, and how it is different from utility-style regulation by primarily involving access requirements, non-discrimination requirements, data control rights for users, and other reductions in entry barriers.
The European Union took a step forward along these lines by passing the Digital Markets Act (DMA) in 2022. The DMA defines “gatekeepers” using objective thresholds, such as annual revenues or monthly active users, and imposes a set of dos and don’ts designed to keep markets fair and contestable. For example, designated gatekeepers must permit rival app stores to be installed on their devices, refrain from ranking their own services more favorably, and ensure that business users have access to the same data and functionality that the platforms offer to themselves.
The UK passed an analogous bill last year: the Digital Markets, Competition and Consumers Act 2024. The law authorizes the UK competition authority to create bespoke regulation for digital platforms with strategic market status. Of the UK, EU, and United States, the U.S. alone has made no progress on the digital regulatory front. The lack of progress in the U.S. is in part due to the recent stresses on its democracy but also reflects the 5-10 year lag relative to our European peers in bringing antitrust cases against Big Tech.
In Digital Platform Regulation, a team of transatlantic experts and I offer a practical roadmap for dismantling these digital moats, restoring competition, and ensuring that innovation and its rewards flow more broadly. It is designed to provide a framework for regulators, legislators, enforcers, and researchers. The book is divided into six parts according to what platform issue is being investigated. We begin by explaining how to open mobile ecosystems so that app developers can reach users without paying exorbitant tolls or facing hidden barriers. We then turn to data markets, showing how privacy-protective data portability and interoperability mandates can unleash new channels of competition without sacrificing user control. Later sections tackle search competition in the age of artificial intelligence, the design of structural and behavioral remedies tailored to digital platforms, and the institutional architecture needed to oversee these regulations effectively.
Throughout, we insist on two guiding principles inspired by the DMA. First, contestability: new entrants with better products must face low entry barriers and minimal switching costs so that consumers can choose freely among competing services. Second, fairness: when business users reap the full rewards of their creativity and investment, this is fair as well as efficient. When platforms expropriate those returns simply by virtue of controlling access to end consumers, business user innovation is discouraged. When platforms charge 30 percent commissions on app-store transactions or insist on being the default search engine in browsers and handsets, they distort incentives and dampen investment.
The success of this framework hinges on political will and enforcement capacity. Europe’s DMA has entered its enforcement phase, yet Apple’s reluctance to permit rival app stores shows how resistance from incumbents and use of legal processes can slow progress. In the U.K., the recent Digital Markets, Competition and Consumers Act faces its own teething problems amidst government turnover. And in the U.S., we have not yet learned that prolonged and uncertain antitrust litigation will not deliver the outcomes consumers want.
However, I am encouraged by the way some antitrust litigators and competition authorities have already begun to draw on the DMA’s clear obligations when crafting remedies. In the U.S., for example, ongoing challenges by Epic Games and state attorneys general to Google’s Play Store and Apple’s App Store for steering consumers away from cheaper alternatives could end up incorporating DMA-style interoperability requirements such as publishing the technical specifications needed for rival app stores or prohibiting dark-pattern default settings. These rules work across jurisdictions because they help new entrants reach users on equal footing. Similarly, judges overseeing search-monopoly cases can look to the essays in this book on remedies assessing index-licensing mandates that would compel dominant engines to share their foundational data with new entrants. By grounding court orders in the same principles that underpin light-touch pro-competitive regulation, we can bridge the gap between litigation and sectoral oversight, delivering at least some swift relief while longer-term regulatory structures take shape.
Ultimately, digital markets are too important to be left to chance or to the goodwill of dominant firms. Policymakers, enforcers, and practitioners around the world now have at their disposal both a rich body of economic research and concrete, field-tested policy tools. My colleagues and I have distilled these insights into a handbook for the digital economy: one that balances precision with flexibility, and rigor with real-world applicability. I invite you to download Digital Platform Regulation (available for free) and to join the conversation: whether you draft legislation, draft court orders, advise businesses, or conduct your own research, your engagement will determine whether the coming decade sees renewed competition, broader innovation, and, above all, markets that truly work for people.
Author Disclosure: Within the last three years, Prof. Scott Morton has consulted for only one DMA digital gatekeeper, Microsoft. She is an economic expert in the UK for a group of users seeking damages from Meta and a group of advertisers seeking damages from Google. She has recently consulted in the US for Bard, Regeneron, Tapestry, SiriusXM, GM, and several electric vehicle makers. She regularly works as an expert witness for government plaintiffs on matters that are confidential.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
