Key Elements and Functions of a New Digital Regulatory Agency

A report issued by the United Kingdom’s competition authority (CMA) provides interim findings that both Google and Facebook have a virtual lock on key elements of and inputs to the digital advertising market. As a result the UK proposes an extensive set of policy interventions through an anticipated new regulatory body that many expect the UK to establish in the near future. Although the UK findings are interim and the U.S. market may have somewhat different attributes, it is almost certainly the case that the US market is likely subject to similar forces that tend to constrain competition. It is time for US policymakers to at least plan for this likelihood and therefore begin working on the development of a similar oversight body to ensure accountability and fair competition in the digital marketplace. What follows is one approach to such an oversight body. Congress should create a new regulatory authority that is focused on digital markets. The most important institutional change needed to address monopolistic tendencies arising in digital markets is competition-expanding regulation that addresses the problems antitrust cannot solve – even with strong enforcement. A new expert regulator equipped by Congress with the tools to promote entry and expansion in these markets could actually expand competition to benefit consumers, entrepreneurship, and innovation.