How to predict where blockchain regulation may be heading
- Blockchain technologies come with exciting promises to build trust between different parties, but have yet to realize their potential.
- Blockchain and antitrust pursue a common goal of freeing economic transactions, explains Dr Thibault Schrepel.
- Cooperation between blockchain and antitrust requires mutual understanding and concrete action points.
Blockchain technologies offer great trust and transparency, without the need for a trusted third party. However, the nature of the Blockchain platform, how its pricing works, and its impact on supply chains present considerable risks of anti-competitive behavior on the part of users, from the blockchain itself or directed at it.
Policymakers and the blockchain community are now looking to competition policy and antitrust experts to find common ground, avoiding scenarios where those who control the blockchain engage in anti-competitive behavior – whether by controlling its price. or by entering into a collusive agreement to raise prices unfairly. . This would decrease confidence in blockchain technologies and prepare them for failure.
We have discussed this emerging issue with Dr. Thibault Schrepel, Associate Professor of Law at VU Amsterdam and Affiliate Professor at the CodeX Center at Stanford University, who has focused most of his research on blockchain antitrust. He says: âWestern legal systems have historically helped build trust between parties and reduce transactional uncertainty by providing for the use of legal procedures. Nonetheless, building trust still imposes significant transaction costs and blockchain can lower them to a lower level. In the meantime, the very nature of the technology raises fundamental questions about antitrust law and how individuals transact. ”
Proactively engaging relevant stakeholders in the blockchain community at an early stage when the technology is still under development, raising awareness of antitrust law concerns and how authorities are dealing with them could be one way forward.
What prompted you to work and contribute to antitrust law, especially with regard to blockchain?
I decided to focus on antitrust at the end of the very first hour of class when I was a student (congratulations to Professor Mainguy). It was “that” for me. Later, I went to the United States to finish my studies and started a comparative doctorate. discuss predatory innovation in digital markets. At that time, I had written a paragraph on blockchain and found myself on an OECD panel to discuss the intersection between blockchain and antitrust.
From that moment on, I never stopped looking for the interaction between the two, which I find fascinating because everything remains open. This led me to write several articles on the subject (all available here) and eventually a book called âBlockchain + Antitrust: The Decentralization Formulaâ (it just came out, and it’s open access!).
I started my field research by addressing the antitrust issues created by the blockchain, which is very typical of lawyers. It took me a while to realize that blockchain and antitrust were going in the same direction and, even more, that they were great complements. The book aims to ensure cooperation while addressing mutual aggression.
What is the most critical challenge you face in the development of computer law, especially with regard to emerging technologies?
It’s hard to say which one is the most critical, but let me name a few. If you are an antitrust expert, learning the technology is a big challenge, but you have to overcome it. Let’s be clear here: Lawyers and antitrust law enforcement officials won’t be required to educate themselves about code blockchains or AI systems from scratch, but to reach an IT level. sufficient to understand the legal implications, options and disadvantages of their actions. The same goes for smartphones: no antitrust expert knows how to design an entire smartphone (in fact, no one could do it all alone all over the world), but some antitrust understand the impact of smartphones on competition, how to regulate their use, etc. Only then will it be relevant to discuss how to ensure procedural fairness, cooperation between agencies and consideration of non-calculable elements while promoting IT antitrust.
If you are a computer scientist, the challenge is slightly different. IT people are required to work with antitrust experts to develop the right tools and the efficient ways to feed those tools with data, but even before that they face an incentive problem. Antitrust firms pay their employees a tiny fraction of what big tech pays them because they can’t pay more. This means that we need to talk about monetary incentives that house and foster this community of practice if we are to overcome this challenge.
Antitrust agencies, policymakers and market players – all can benefit from the emerging field of computer antitrust, which seeks to develop computer methods for automating antitrust proceedings and improving antitrust analysis. The Stanford Computational Antitrust Project was established in January 2021 to raise awareness and provide real-world research and solutions in space. It brings together more than 55 competition agencies and an academic council of 35 academics. All of our publications are freely available, soâ¦ don’t hesitate to take a look.
What’s the most exciting new development in antitrust regulation globally?
I’m not sure how to identify the most exciting new development, but the one that excites me the most is about the combination of technology and law, whether it’s increasing procedures and analysis or achieving results. substantial objectives. In âBlockchain + Antitrustâ I explain that blockchain and antitrust have a common goal of freeing economic transactions from coercion, for example through decentralization.
What is the most misunderstood about your job? What would you like people to know?
I would like us to be able to move beyond the debate on the application of the âanti-proâ law. My work does not fit anywhere on this scale as it seeks to contribute to a different, hopefully more dynamic application, more in line with complexity theory and innovation. On the one hand, I see the use of computational tools – computational problem-solving methods, such as natural language processing, unsupervised machine learning, or agent-based modeling – as a way to reconcile the application of antitrust laws to market realities. In addition, blockchain antitrust requires another type of application activity, called pro-blockchain, which involves protecting technologies from artificial forms of centralization without compromising the fundamental characteristics of the blockchain.
How can legal systems catch up and take advantage of advances in data science and technology to support innovation?
Legal systems are designed and managed by human beings, so education is essential. I think that being acquitted in computer science requires learning by doing. For this purpose, I have listed open access resources, accessible to all. Antitrust agencies and governments must prioritize learning about the latest blockchain advancements as well as the risks and opportunities so that public systems catch up.
Now, more specifically for legal systems, there is a challenge of developing the right computational tools and feeding them in the right way. In some cases, the necessary data is already in the hands of the agencies; for example, they could label their past case law and train machine learning systems on this basis to detect new patterns. In other cases, the data is âout thereâ – in the marketplace. Here it might be difficult to access the desired information. Scraping the web might help, using public documentation in the hands of other government agencies might help as well, but eventually we will need to give agencies greater investigative powers. The CMA was able to access Google and Bing search queries for a week, which would be impossible for the European Commission. This is an important topic that we should discuss with procedural fairness to ensure that IT antitrust improves the common good and not personal agendas.
How can antitrust and the blockchain community collaborate in the long term?
I dedicate title 3 of “Blockchain + Antitrust” to this question, but here is what I would like to say in a few words: cooperation is only possible if we (1) agree on the need to cooperate, ( 2) let’s address blocking points (when antitrust violates the blockchain and when antitrust violates the function and purpose of the blockchain), and (3) implement a concrete program. One thing is certain: without a good understanding of the other (i.e. blockchain or antitrust, depending on your experience and training), no cooperation will ever be achieved. Unfortunately, a confrontation between the two would end up working against the interests of blockchain communities, the interests of antitrust communities and, more broadly, the interests of our democratic market societies. It’s a simple game theory; you might want to try this little game to convince yourself. In the meantime, thank you very much for your questions!
For more information and analysis from the World Economic Forum, explore the Blockchain Transformation Map hosted by the Korea Advanced Institute of Science and Technology (KAIST).