II. RISKS OF DIGITAL MARKETS TO FAIR COMPETITION The transition of the economy to digital markets has encountered several risks to fair competition. A study by the Portuguese Competition Authority states that “there are a number of consumer behavioral aspects and biases that can create barriers to entry and expansion for operators. In this regard, reference should be made to the salience effects, whereby consumers place excessive value on the most salient information. In addition, consumer behavior can sometimes favor maintaining the status quo and generate resistance to change. On the other hand, consumers are also characterized by impatience and less self-control in their consumption decisions.”14. In addition, the exponential growth of information society services platforms maximizes the direct and/or indirect network effect, with potentially adverse consequences for competition. This concept of network effect has been widely discussed in the Information and Communication Technologies (ICT) industry, particularly in relation to the concept of horizontal interoperability, which occurs in communication between different computer systems and allows the exchange of tasks, data, and communications between them15. According to this network effect theory, the more users use a particular IT product (e.g., a computer program), the more likely other users are to be interested in using that product, to benefit from the synergies created by this interoperability. The same reasoning applies to most digital platforms and the services and products they offer16. The more users a digital platform has, the more impact it will have on attracting customers to the products and services offered on it. But it will also become more attractive to economic agents and consumers. This puts larger digital platforms in a position of potential dominance (manipulation) over the market and, conversely, puts most smaller economic agents in a position of weakness (in terms of negotiation and competition). 14 In AUTORIDADE DA CONCORRÊNCIA, Ecossistemas digitais, Big Data e Algoritmos, p. 1–80, 2019, p. 23. 15 «As more people use a particular product, such a word processor from a particular vendor, the value of that component or product increases for other users as well. This is known as a ‘network effect’ (...)» ROOIJEN, Ashwin van, The software interface between copyright and competition law : a legal analysis of interoperability in computer programs, [s.l.]: Kluwer Law International B.V, 2010, p. 9. 16 This is precisely the conclusion reached by the aforementioned 2019 study by the Competition Authority, in AUTORIDADE DA CONCORRÊNCIA, Ecossistemas digitais, Big Data e Algoritmos, p. 24.. 573 FAIR COMPETITION IN THE RANKING OF COMMERCIAL ESTABLISHMENTS
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