miércoles, 15 de julio de 2015

The case for #digital regulations (I)

One of the mantras of the extreme liberalism is the firm believe of the efficiency of the markets over any attempt of regulation by the governments. According with their view, and particularly in the most dynamic sectors, the slowness of the legislative process will never be able to meet the needs of regulation, if any exists. If we add to the described mantra the idea that any regulation should be based on evidences, the conclusion is that governments should not regulate ever.

The digital policies is one of the scenarios where the "never regulate" advice is more often repeated. The liberal vision on digital economy is that either it is to soon to regulate and the regulation will stifle innovation or the regulation will not solve any issue because the agil evolution of the technology will supersede the technology that we want to regulate. This vision is particularly frequent in the US, where any local attempt to introduce or suggest a rule in the EU digital field is seen as protectionism.

However, there are signals that we need stronger ex-ante regulations on the digital world. One of this signals is the growing list of cases on the hands of the EU competition authorities regarding digital matters. The extremist liberal point of view is to let the competition authority acts and determines if a real market failure exist. But we cannot rely forever on this vision. The past show us that when the resolution of the case is reached the weak part has already disappeared. Remember the Netscape vs Microsoft case for instance.

There is an excess of demand on the development of future proof regulations. However, regulators do not fear to base their work in the past. According to McKinsey research, from 1990 to 2005, US companies almost always allocate resources on the basis of past, rather than future, opportunities. The need to base regulations on the past should not be seen necessarily as a wrong choice. Taking into account experience is good both for the private and public sector. The alternative is the abdication of the regulatory activity and that is an option the society cannot afford.

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