The Effects of Metaverse Features on Antitrust Analysis of Market Power

دانشنامه حقوق اقتصادی

Volume 31, Issue 25, September 2024, Pages 123-139   

Document Type: Scientific research

DOI: 10.22067/economlaw.2024.88296.1373

Authors

Seyed Mohammad Hadi Ghabooli Dorafshan^{* 1}; Mostafa Bakhtiarvand²

¹Associate Professor, Department of Islamic Jurisprudence and Principles of Islamic Law, Faculty of Theology and Islamic Studies, Ferdowsi University of Mashhad, Mashhad, Iran.

²Associate Professor, Department of Private Law and Intellectual Property Law, University of Qom, Qom, Iran

Abstract

Metaverse is a new market where digital platforms operate. In order to flourish, this market needs competition between existing platforms and the provision of conditions for the entry of new competitors. In the Metaverse market, it is probable that undertakings abuse their dominant economic position. Verification of this unilateral behavior, which is an example of anti-competitive practices, requires examining the market power of the platforms. The results of this article, written in a descriptive-analytical way, with the aim of investigating how the characteristics of Metaverse affect market power, show that the characteristics of Metaverse, as a digital market, influence market power in a way that makes it different from the market power in the traditional business environment and should be taken into consideration in the antitrust analysis of the behavior of the companies in the Metaverse. The characteristics affecting the market power in the Metaverse include network effects, being based on data, economies of scale, the market being two or multi-sided and the existence of digital ecosystems. These features give the dominant undertakings such market power that they can monopolize the market and prevent the entry of new competitors.

Keywords

Metaverse market; Market power; Network effects; Digital platforms; Digital ecosystems

References

 

References

• Abdi Pour I (2009), Abuse of Dominant Economic Position. Islamic Law Journal, Year 6, No. 21, 125-155.
• Akefi Ghaziani, M. et al. (2022), Metaverse and Legal Challenges in Property Law. Modern Technologies Law, 3(6), 142-153.
• APEC Competition Policy and Law Group (2022), Competition Law and Regulation in Digital Markets, APEC Secretariat.
• 40099 – Google Android.
• Autorité de la concurrence, CNIL (2023), Competition and personal data: a common ambition, available at: https://www.cnil.fr/sites/cnil/files/2023-12/competition_and_personal_data_a_common_ambition_joint_declaration_by_the_cnil_and_the_adlc.pdf (visited: 2/10/2024).
• Bakhtiarvand, M, Mikaniki, B. (2020), Intellectual Property Rights in the Second-life Virtual World, Private Law, 17(1),83-100.
• Buchholz, F, Oppermann, L, Prinz, W (2022), There’s more than one Metaverse, i-com 2022; 21(3): 313–323, http://dx.doi.org/10.1515/icom-2022-0034.
• C-27/76 United Brands v Commission EU:C:1978:22.
• Clifford Chance (2022), The Metaverse: What Are the Legal Challenges? available at: https://www.cliffordchance.com/content/dam/cliffordchance/briefings/2022/02/the-Metaverse-what-are-the-legal-implications.pdf (visited: 12/20/2023).
• Congressional Research Service (2022), The Metaverse: Concepts and Issues for Congress, available at: https://sgp.fas.org/crs/misc/R47224.pdf (visited: 11/11/2023).
• Congressional Research Service (2023), Antitrust Reform and Big Tech Firms, available at: file:///E:/competition/New/congressional%20research%20service,2023.pdf (visited: 2/10/2024).
• Council of the European Union (2022), Metaverse- Virtual Worlds, Real Challenges, available at: https://www.consilium.europa.eu/media/54987/Metaverse-paper-9-march-2022.pdf (visited: 2/9/2024).
• Crauthers, R.S. (2022), Antitrust: into the Metaverse, available at: https://www.wsgr.com/en/insights/antitrust-into-the-Metaverse.html (visited: 2/9/2024).
• Crémer, J., , Montjoye, Y., Schweitzer, H., Competition policy for the digital era, Publications Office, 2019,https://data.europa.eu/doi/10.2763/407537.
• Darabpour, M. R. (2023). Metaverse; Nature and Legal Challenges (Governance, Persons and Property). Modern Technologies Law, 4(7), 65-81.
• Dasgupta,K, Williams, M (2020), The New Economics and Regulation of Digital Platforms: Lessons from the Old World of Regulation? ITS Online Event, available at: https://www.econstor.eu/bitstream/10419/224850/1/Dasgupta-Williams.pdf (visited: 10/13/2023).
• Delevaux, R (2022), Regulating the Metaverse: issues and regulatory strategies, available at: https://www.iicom.org/wp-content/uploads/Rodman-Deleveaux.pdf (visited: 10/3/2023).
• European Commission (2021), Commission Notice on the definition of relevant market for the purposes of Community competition law of 9 December 1997, available at: https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A31997Y1209%2801%29 (visited: 2/10/2024).
• Google and Alphabet v Commission (Google Shopping) EU:T:2021:76.3.
• Hoffmann-La Roche & Co. AG v. Commission, Case C-85/76, 1979 E.C.R. 461.
• https://digitalfreedomfund.org/wp-content/uploads/2020/05/5_DFF-Factsheet-Self-preferencing-and-EU-competition-law.pdf (VISITED:2/11/2024).
• https://techinsights.linklaters.com/post/102htcb/Metaverse-series-3-looking-at-Metaverses-with-antitrust-3d-glasses (visited: 12/5/2023).
• https://www.fortunebusinessinsights.com/Metaverse- (visited: 12/5/2023).
• https://www.fortunebusinessinsights.com/Metaverse-market-106574 (2/10/2024).
• https://www.merriam-webster.com/dictionary/Metaverse (12/12/2023).
• https://www.nicc.gov.ir/council/decisions-council/687-306-1396-06-13.html (visited: 10/20/2023).
• https://www.oecd.org/daf/competition/competition-economics-of-digital-ecosystems.htm (visited: 1/20/2024).
• https://www.oed.com/dictionary/Metaverse_n?tl=true (visited: 11/2/2023).
• ICC (2023), Digital Economy and Competition: Digital Platforms’ Main Aspects under Competition Perspective, available at: https://www.iccbrasil.org/wp-content/uploads/2022/07/WORKING-PAPER-Digital-Economy-and-Competition-1-1.pdf (visited: 2/11/2024).
• ITU (2023), Policy and regulation opportunities and challenges in the Metaverse, ITU, available at: https://www.itu.int/en/ITU-T/focusgroups/mv/Documents/List%20of%20FG-MV%20deliverables/FGMV-07.pdf (visited: 1/5/2024).
• Kadkhodaei et al. (2023), “Competition Law on Digital Platforms; The Need to Revise Traditional Regulations”, The Quarterly Journal of Public Law Research, 25(79), 7-40.
• Knapstad, T (2023), Digital dominance: assessing market definition and market power for online platforms under Article 102 TFEU, European Competition Law Journal, https://doi.org/10.1080/17441056.2023.2280334.
• Kuo, H (2023), Competition in EU Digital Markets, Master Thesis, European Business Law.
• Landes, W.M, Posner, R.A. (1980), Market Power in Antitrust Cases, Harvard Law Review, 94(5): 937-996.
• Latifzadeh, M, Ghabooli Dorafshan. S.M.M. (2023-a), Introducing Digital Identity in Metaverse, Identifying Related Legal Challenges and Solutions, Private Law Studies Quarterly, 53, 2: 349 – 372.
• Latifzadeh, M., & Qabuli Dorafshan, S.M.M. (2023-b) Research on the legal issues of Metaverse with emphasis on how to protect children. Modern Technologies Law, 4(8), 165-182.
• Manganelli, A, Nicita, A (2021), Regulating digital platforms: The road ahead, Competition Law Review, 2-2021: 15-21.
• Moradi Berelian (2022), An Introduction to Consequences and Legal Challenges of Metaverse, Legal Research Quarterly, 25, 363-391.
• Murati, E (2021), What are digital platforms? An overview of definitions, typologies, economics and legal challenges arising from the platform economy in EU, EJPLT, 2021/1: 19-55.
• Nachbar, T.B (2023), Qualitative Market Definition, Virginia Law Review, 109: 373-426.
• Newman, J.M (2020), Antitrust in Attention Markets: Definition, Power, Harm, University of Miami Legal Studies Research Paper No. 3745839, available at SSRN: https://ssrn.com/abstract=3745839 (visited: 2/10/2024).
• OECD (2020), Abuse of Dominance in Digital Markets – Contribution from Mexico, available at: https://one.oecd.org/document/DAF/COMP/GF/WD(2020)35/en/pdf (visited: 2/7/2024).
• OFcom (2023), Future technology and media literacy: The Metaverse, available at: https://www.ofcom.org.uk/__data/assets/pdf_file/0024/263427/Future-technology-and-media-literacy.pdf (visited: 2/9/2024).
• Park, S.M, Kim Y.G. (2023), A Metaverse: Taxonomy, Components, Applications, and Open Challenges, IEEE Access, vol. 10:4209-4251, 2022, 10.1109/ACCESS.2021.3140175.
• Petropoulos, G (2020), Competition Economics of Digital Ecosystems, available at: https://one.oecd.org/document/DAF/COMP/WD(2020)91/en/pdf (visited: 10/20/2023).
• Rahbari, I (2022), An Analysis of Legal Challenges of Big Data, Legal Research Quarterly, 98,295-319.
• Sadeghi Moghaddam, M.H, Ghafari Farsani, B. (2000), The Spirit of Competition Law (Comparative Study of the Goals of Competition Law), Legal Journal of Judiciary, n.73, 113-146.
• Salan, M (2022), Market Power Analysis in the Digital Era: The Case of Digital Multi-Product Ecosystems , Master’s Thesis Law and Technology LL.M, Tilburg Institute for Law, Technology and Society.
• Schoِbel, S.; Leimeister, J. M. (2023). Metaverse Platform Ecosystems, Electronic Markets (Electron Markets), 33(1),1-12, https://doi.org/10.1007/s12525-023-00623-w.
• Schrepel, T (2021), Platforms or Aggregators: Implications for Digital Antitrust Law, Journal of European Competition Law & Practice, 12, 1: 1-3.
• Todd, P.F (2019), Digital Platforms and the Leverage Problem, Neb. L. Rev, 98/2: 486-541.
• S Government Publishing Office (2022), Investigation of Competition in Digital Markets, available at: https://www.congress.gov/117/cprt/HPRT47833/CPRT-117HPRT47833.pdf (visited: 2/10/2024).
• UNCTAD (2019), Competition issues in the digital economy, available at: https://unctad.org/system/files/official-document/ciclpd54_en.pdf (visited: 12/9/2023).
• Wheelerm T (2022),Who Will Make the Rules for the Metaverse? ,M-RCBG Associate Working Paper Series | No. 195, Available at: https://www.hks.harvard.edu/sites/default/files/centers/mrcbg/files/195_AWP_final.pdf (visited: 11/6/2023).
• WTO (2023), Promoting Competition for E-Commerce, available at: https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/GC/W902R1.pdf&Open=True (visited: 12/5/2023)