Managing competition in a digital world

The internet governance model offers an alternative model to address the challenges posed by a network economy

Addressing competition in the digital domain presents a formidable challenge for governments and regulators. Unlike the physical realm, where network effects are limited, digital products and services often exhibit robust network effects. Put simply, network effects occur when every new user enhances the value of the offering for all others. The telephone is a classical example. Networks defy the traditional economics of competition and efficiency. Instead, they can lead to winner-takes-all scenarios, creating monopolies or oligopolies. Recognising this characteristic of the network industry, AT&T, a hundred years back, described telephony as a natural monopoly. Google Search, Microsoft Office, Android OS,