SlideShare une entreprise Scribd logo
1  sur  11
Télécharger pour lire hors ligne
COLLUSION AND
EXCLUSION IN
CRYPTOCURRENCY
MARKETS
OECD COMPETITION COMMITTEE HEARING, 8 JUNE 2018
PEDER ØSTBYE, SPECIAL ADVISER
NORGES BANK
The essence of cryptocurrencies
2
 Cryptography-based asset disposal
– Users dispose over assets linked to register-addresses with a private key
– Ownership verified with a public key
– Pseudo-anonymity
– Various degrees of programming features for “smart-contracts”
(conditional disposal)
 Decentralized operation and governance
– The users validate transactions and maintain a distributed ledger (DLT)
– Detection and punishment of misbehavior facilitate integrity (e.g.
processing only valid transactions, preventing double spending,
consented coin growth)
– Bitcoin: Proof-of-Work blockchain
Cryptocurrencies can improve competition
3
 Cryptocurrencies created with the intention to compete with
traditional finance?
– “[w]hat is needed is an electronic payment system based on cryptographic
proof instead of trust, allowing any two willing parties to transact directly
with each other without the need for a trusted third party.” Nakamoto
(2008)
 Regulation is needed: crime prevention, consumer protection,
systemic risk mitigation
– But regulations should not unnecessary restrict or distort competition
 We must also consider how competition can be restricted in
cryptocurrency markets
What are the relevant markets associated
cryptocurrencies?
4
 Cryptocurrencies provide some money functions
– Medium of exchange
– Store of value
– Unit of account
 Cryptocurrencies are separate payment systems
– Compete with each other and traditional payment systems/services
providers
 Cryptocurrencies can be platforms for the intermediation of suitable
services
– Smart contracts
– AI services
– Data storage
Market power in cryptocurrency markets
5
 Market power within a cryptocurrency
– Certain stakeholders can have market power vis-a-vis other stakeholders
in a cryptocurrency
– Anti-competitive alliances are possible
 Market power in broader relevant markets where a cryptocurrency
participate
– Certain cryptocurrencies may gain a strong position in a relevant market
– The stakeholders can engage in exclusionary or exploitative practices
Market power within a cryptocurrency
6
Some stakeholders in a cryptocurrency
 Operators
– Users who perform validation and maintain the cryptocurrency’s integrity
 Code-developers
 Input providers
– Software, hardware, electricity, communication providers, financial service
providers
 Normal users
– Those who use the cryptocurrency as intended
Market power within a cryptocurrency
7
Some examples of possible anti-competitive actions
 Agreements and collusion
– Collusion both for exclusion and exploitation
– Mining pools
– Vertical restraints between operators and input providers
 Unilateral conduct
– Excessive transaction fees
– Exclusion transactions by certain users or of blocks validated by certain
validators
 Mergers
– Purchase of coins/tokens
– Purchase of mining equipment
– Vertical integration of stakeholders, e.g. operators and input providers
Market power in broader relevant markets
8
Some stakeholders
 Stakeholders within the various cryptocurrencies
 Wallets and exchanges
 Payment services providers
 Financial infrastructures
 Banks
 Internet/communication providers
Market power in broader relevant markets
9
Some possible anti-competitive actions
 Agreements and collusion
– Collusions between stakeholders in different cryptocurrencies
– Exclusive agreements between stakeholders in a cryptocurrency and third-
party providers
– Exclusive agreements between internet/communication providers and
cryptocurrency stakeholders
 Unilateral conduct
– Exchanges, wallets or payment services providers may obtain a dominant
positions and discriminate against certain cryptocurrencies
 Mergers
– Cross ownership in cryptocurrencies
– Banks, traditional payment services providers, or internet providers might
acquire control over cryptocurrencies and associated platforms
Challenge 1: methodology
10
 The governance structure of a cryptocurrency is very different from a
usual firm
– How to specify profit functions?
 How to analyze competition and assess market power?
– How can cryptocurrency operators possess market power?
– How to measure market power?
 Is the traditional industrial organization workhorse sufficient?
– Textbook IO models may not be useful representations
– New forms of co-opetition
– How do network effects play out?
– Must competition authorities learn more «cryptoeconomics»?
Challenge 2: competition law application
11
 Substantive issues
– Who can be liable according to comeptition law?
– Distinguishing coordination and unilateral behavior (e.g. are validators
acting unilaterally or coordinated when complying with protocols)?
– How to determine dominant position/monopoly power?
– What is a merger?
 Enforcement issues
– How to deal with pseudo-anonymous operators?
– How to deal with cross-jurisdictional operations?
– What are the right remedies?

Contenu connexe

Tendances

Blockchain in supply chain conference Jul19 - Christina Patsioura
Blockchain in supply chain conference Jul19 - Christina Patsioura Blockchain in supply chain conference Jul19 - Christina Patsioura
Blockchain in supply chain conference Jul19 - Christina Patsioura Christina Patsioura
 
Blockchain across sectors - healthcare, finance, industry, media
Blockchain across sectors - healthcare, finance, industry, mediaBlockchain across sectors - healthcare, finance, industry, media
Blockchain across sectors - healthcare, finance, industry, mediaCILIP
 
FinTech_Thailand's FinTech Regulatory Sandbox
FinTech_Thailand's FinTech Regulatory SandboxFinTech_Thailand's FinTech Regulatory Sandbox
FinTech_Thailand's FinTech Regulatory SandboxKullarat Phongsathaporn
 
How crypto tokens qualify under swiss law a comprehensive framework
How crypto tokens qualify under swiss law a comprehensive frameworkHow crypto tokens qualify under swiss law a comprehensive framework
How crypto tokens qualify under swiss law a comprehensive frameworkRonald Kogens
 
Essential Facilities Doctrine in the Data-driven Economy (Alexandre de Streel)
Essential Facilities Doctrine in the Data-driven Economy (Alexandre de Streel)Essential Facilities Doctrine in the Data-driven Economy (Alexandre de Streel)
Essential Facilities Doctrine in the Data-driven Economy (Alexandre de Streel)FSR Communications and Media
 
Regulatory & Legal Aspects of Distributed Ledger Technology
Regulatory & Legal Aspects of Distributed Ledger TechnologyRegulatory & Legal Aspects of Distributed Ledger Technology
Regulatory & Legal Aspects of Distributed Ledger TechnologyITU
 

Tendances (20)

Regulation and competition in light of digitalisation – UK Competition & Mark...
Regulation and competition in light of digitalisation – UK Competition & Mark...Regulation and competition in light of digitalisation – UK Competition & Mark...
Regulation and competition in light of digitalisation – UK Competition & Mark...
 
Digital disruption in financial markets – VIVES – June 2019 OECD discussion
Digital disruption in financial markets – VIVES – June 2019 OECD discussionDigital disruption in financial markets – VIVES – June 2019 OECD discussion
Digital disruption in financial markets – VIVES – June 2019 OECD discussion
 
Data Portability and Interoperability – NETHERLANDS – June 2021 OECD discussion
Data Portability and Interoperability – NETHERLANDS – June 2021 OECD discussionData Portability and Interoperability – NETHERLANDS – June 2021 OECD discussion
Data Portability and Interoperability – NETHERLANDS – June 2021 OECD discussion
 
Big data: Bringing competition policy to the digital era – STUCKE – November ...
Big data: Bringing competition policy to the digital era – STUCKE – November ...Big data: Bringing competition policy to the digital era – STUCKE – November ...
Big data: Bringing competition policy to the digital era – STUCKE – November ...
 
Cartel screening in the digital era – UK Competition & Markets Authority – Ja...
Cartel screening in the digital era – UK Competition & Markets Authority – Ja...Cartel screening in the digital era – UK Competition & Markets Authority – Ja...
Cartel screening in the digital era – UK Competition & Markets Authority – Ja...
 
Regulation and competition in light of digitalisation – CNMC Spain – January ...
Regulation and competition in light of digitalisation – CNMC Spain – January ...Regulation and competition in light of digitalisation – CNMC Spain – January ...
Regulation and competition in light of digitalisation – CNMC Spain – January ...
 
Regulation and competition in light of digitalisation – David Stallibrass – J...
Regulation and competition in light of digitalisation – David Stallibrass – J...Regulation and competition in light of digitalisation – David Stallibrass – J...
Regulation and competition in light of digitalisation – David Stallibrass – J...
 
Digital disruption in financial markets – NORWAY – June 2019 OECD discussion
Digital disruption in financial markets – NORWAY – June 2019 OECD discussionDigital disruption in financial markets – NORWAY – June 2019 OECD discussion
Digital disruption in financial markets – NORWAY – June 2019 OECD discussion
 
Blockchain in supply chain conference Jul19 - Christina Patsioura
Blockchain in supply chain conference Jul19 - Christina Patsioura Blockchain in supply chain conference Jul19 - Christina Patsioura
Blockchain in supply chain conference Jul19 - Christina Patsioura
 
Data Portability and Interoperability – UK – June 2021 OECD discussion
Data Portability and Interoperability – UK – June 2021 OECD discussionData Portability and Interoperability – UK – June 2021 OECD discussion
Data Portability and Interoperability – UK – June 2021 OECD discussion
 
S26: Techsauce Global Summit 2018
S26: Techsauce Global Summit 2018S26: Techsauce Global Summit 2018
S26: Techsauce Global Summit 2018
 
Blockchain across sectors - healthcare, finance, industry, media
Blockchain across sectors - healthcare, finance, industry, mediaBlockchain across sectors - healthcare, finance, industry, media
Blockchain across sectors - healthcare, finance, industry, media
 
Competition and Disruptive Innovation
Competition and Disruptive InnovationCompetition and Disruptive Innovation
Competition and Disruptive Innovation
 
Big data: Bringing competition policy to the digital era – Background note – ...
Big data: Bringing competition policy to the digital era – Background note – ...Big data: Bringing competition policy to the digital era – Background note – ...
Big data: Bringing competition policy to the digital era – Background note – ...
 
Regulation and competition in light of digitalisation – Korean Fair Trade Com...
Regulation and competition in light of digitalisation – Korean Fair Trade Com...Regulation and competition in light of digitalisation – Korean Fair Trade Com...
Regulation and competition in light of digitalisation – Korean Fair Trade Com...
 
FinTech_Thailand's FinTech Regulatory Sandbox
FinTech_Thailand's FinTech Regulatory SandboxFinTech_Thailand's FinTech Regulatory Sandbox
FinTech_Thailand's FinTech Regulatory Sandbox
 
How crypto tokens qualify under swiss law a comprehensive framework
How crypto tokens qualify under swiss law a comprehensive frameworkHow crypto tokens qualify under swiss law a comprehensive framework
How crypto tokens qualify under swiss law a comprehensive framework
 
Big data: Bringing competition policy to the digital era – EU DG COMP – Novem...
Big data: Bringing competition policy to the digital era – EU DG COMP – Novem...Big data: Bringing competition policy to the digital era – EU DG COMP – Novem...
Big data: Bringing competition policy to the digital era – EU DG COMP – Novem...
 
Essential Facilities Doctrine in the Data-driven Economy (Alexandre de Streel)
Essential Facilities Doctrine in the Data-driven Economy (Alexandre de Streel)Essential Facilities Doctrine in the Data-driven Economy (Alexandre de Streel)
Essential Facilities Doctrine in the Data-driven Economy (Alexandre de Streel)
 
Regulatory & Legal Aspects of Distributed Ledger Technology
Regulatory & Legal Aspects of Distributed Ledger TechnologyRegulatory & Legal Aspects of Distributed Ledger Technology
Regulatory & Legal Aspects of Distributed Ledger Technology
 

Similaire à Blockchain and Competition – OSTBYE – June 2018 OECD discussion

20190316 - CLBFest - Blockchain & the law - Willem Van de Wiele
20190316 - CLBFest - Blockchain & the law - Willem Van de Wiele20190316 - CLBFest - Blockchain & the law - Willem Van de Wiele
20190316 - CLBFest - Blockchain & the law - Willem Van de WieleBrussels Legal Hackers
 
International Blockchain Conference in Groningen, Nov. 30, 2018
International Blockchain Conference in Groningen, Nov. 30, 2018International Blockchain Conference in Groningen, Nov. 30, 2018
International Blockchain Conference in Groningen, Nov. 30, 2018Vlad Burilov
 
How to get Governments to Like Bitcoin (Without Ruining Bitcoin in the Process)
How to get Governments to Like Bitcoin (Without Ruining Bitcoin in the Process) How to get Governments to Like Bitcoin (Without Ruining Bitcoin in the Process)
How to get Governments to Like Bitcoin (Without Ruining Bitcoin in the Process) MecklerMedia
 
B11: Central IP & IT Court | FinTech: Legal and Regulatory Challenges (7 Aug ...
B11: Central IP & IT Court | FinTech: Legal and Regulatory Challenges (7 Aug ...B11: Central IP & IT Court | FinTech: Legal and Regulatory Challenges (7 Aug ...
B11: Central IP & IT Court | FinTech: Legal and Regulatory Challenges (7 Aug ...Kullarat Phongsathaporn
 
OECD Blockchain Conference - Competition Law - Falk Schoening
OECD Blockchain  Conference - Competition Law - Falk SchoeningOECD Blockchain  Conference - Competition Law - Falk Schoening
OECD Blockchain Conference - Competition Law - Falk SchoeningFalk Schöning
 
Regulatory challenges for Fintech across Europe
Regulatory challenges for Fintech across EuropeRegulatory challenges for Fintech across Europe
Regulatory challenges for Fintech across EuropeSimon Lelieveldt
 
Finra - implications of blockchain for the securities industry
Finra - implications of blockchain for the securities industryFinra - implications of blockchain for the securities industry
Finra - implications of blockchain for the securities industryIan Beckett
 
ETHICOMP 2020: Exploring Value Sensitive Design for Blockchain Development
ETHICOMP 2020: Exploring Value Sensitive Design for Blockchain DevelopmentETHICOMP 2020: Exploring Value Sensitive Design for Blockchain Development
ETHICOMP 2020: Exploring Value Sensitive Design for Blockchain DevelopmentRoberto García
 
Blockchain and the investment industry stack
Blockchain and the investment industry stackBlockchain and the investment industry stack
Blockchain and the investment industry stackDavid Taylor
 
Cryptocurrency Explained With Pros and Cons for Investment
Cryptocurrency Explained With Pros and Cons for InvestmentCryptocurrency Explained With Pros and Cons for Investment
Cryptocurrency Explained With Pros and Cons for Investmentmsbensemble
 
disruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.ppt
disruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.pptdisruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.ppt
disruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.pptariefsetyawan17
 
disruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.ppt
disruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.pptdisruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.ppt
disruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.pptHECTOREDUARDOUGARTER
 
Decentralized Finance
Decentralized FinanceDecentralized Finance
Decentralized FinanceIRJET Journal
 
8 dobrauz the dynamics of innovation
8 dobrauz the dynamics of innovation8 dobrauz the dynamics of innovation
8 dobrauz the dynamics of innovationWalter Strametz
 
B20: AMLO | FinTecha and New Technologies: AML/CTF Perspectives (5 Jul 2017)
B20: AMLO | FinTecha and New Technologies: AML/CTF Perspectives (5 Jul 2017)B20: AMLO | FinTecha and New Technologies: AML/CTF Perspectives (5 Jul 2017)
B20: AMLO | FinTecha and New Technologies: AML/CTF Perspectives (5 Jul 2017)Kullarat Phongsathaporn
 
From Cryptoequity to Cryptocommons
From Cryptoequity to CryptocommonsFrom Cryptoequity to Cryptocommons
From Cryptoequity to CryptocommonsRaffaele Mauro
 
IRJET-Concurrency, Security Issues and Upcoming Challenges to Legal Framework...
IRJET-Concurrency, Security Issues and Upcoming Challenges to Legal Framework...IRJET-Concurrency, Security Issues and Upcoming Challenges to Legal Framework...
IRJET-Concurrency, Security Issues and Upcoming Challenges to Legal Framework...IRJET Journal
 
Cryptocurrenty and Blockchain - SSMRV.pptx
Cryptocurrenty and Blockchain - SSMRV.pptxCryptocurrenty and Blockchain - SSMRV.pptx
Cryptocurrenty and Blockchain - SSMRV.pptxChristopherDevakumar1
 
Blockchain and international trade, trade finance, and supply chain (1)
Blockchain and international trade, trade finance, and supply chain (1)Blockchain and international trade, trade finance, and supply chain (1)
Blockchain and international trade, trade finance, and supply chain (1)Sunny Sian
 

Similaire à Blockchain and Competition – OSTBYE – June 2018 OECD discussion (20)

20190316 - CLBFest - Blockchain & the law - Willem Van de Wiele
20190316 - CLBFest - Blockchain & the law - Willem Van de Wiele20190316 - CLBFest - Blockchain & the law - Willem Van de Wiele
20190316 - CLBFest - Blockchain & the law - Willem Van de Wiele
 
International Blockchain Conference in Groningen, Nov. 30, 2018
International Blockchain Conference in Groningen, Nov. 30, 2018International Blockchain Conference in Groningen, Nov. 30, 2018
International Blockchain Conference in Groningen, Nov. 30, 2018
 
Mahonen blockchain 2018
Mahonen blockchain 2018Mahonen blockchain 2018
Mahonen blockchain 2018
 
How to get Governments to Like Bitcoin (Without Ruining Bitcoin in the Process)
How to get Governments to Like Bitcoin (Without Ruining Bitcoin in the Process) How to get Governments to Like Bitcoin (Without Ruining Bitcoin in the Process)
How to get Governments to Like Bitcoin (Without Ruining Bitcoin in the Process)
 
B11: Central IP & IT Court | FinTech: Legal and Regulatory Challenges (7 Aug ...
B11: Central IP & IT Court | FinTech: Legal and Regulatory Challenges (7 Aug ...B11: Central IP & IT Court | FinTech: Legal and Regulatory Challenges (7 Aug ...
B11: Central IP & IT Court | FinTech: Legal and Regulatory Challenges (7 Aug ...
 
OECD Blockchain Conference - Competition Law - Falk Schoening
OECD Blockchain  Conference - Competition Law - Falk SchoeningOECD Blockchain  Conference - Competition Law - Falk Schoening
OECD Blockchain Conference - Competition Law - Falk Schoening
 
Regulatory challenges for Fintech across Europe
Regulatory challenges for Fintech across EuropeRegulatory challenges for Fintech across Europe
Regulatory challenges for Fintech across Europe
 
Finra - implications of blockchain for the securities industry
Finra - implications of blockchain for the securities industryFinra - implications of blockchain for the securities industry
Finra - implications of blockchain for the securities industry
 
ETHICOMP 2020: Exploring Value Sensitive Design for Blockchain Development
ETHICOMP 2020: Exploring Value Sensitive Design for Blockchain DevelopmentETHICOMP 2020: Exploring Value Sensitive Design for Blockchain Development
ETHICOMP 2020: Exploring Value Sensitive Design for Blockchain Development
 
Blockchain and the investment industry stack
Blockchain and the investment industry stackBlockchain and the investment industry stack
Blockchain and the investment industry stack
 
Cryptocurrency Explained With Pros and Cons for Investment
Cryptocurrency Explained With Pros and Cons for InvestmentCryptocurrency Explained With Pros and Cons for Investment
Cryptocurrency Explained With Pros and Cons for Investment
 
disruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.ppt
disruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.pptdisruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.ppt
disruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.ppt
 
disruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.ppt
disruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.pptdisruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.ppt
disruptions-from-the-fintech-sector-wha-t-s-coming-and-how-should-we-prepare.ppt
 
Decentralized Finance
Decentralized FinanceDecentralized Finance
Decentralized Finance
 
8 dobrauz the dynamics of innovation
8 dobrauz the dynamics of innovation8 dobrauz the dynamics of innovation
8 dobrauz the dynamics of innovation
 
B20: AMLO | FinTecha and New Technologies: AML/CTF Perspectives (5 Jul 2017)
B20: AMLO | FinTecha and New Technologies: AML/CTF Perspectives (5 Jul 2017)B20: AMLO | FinTecha and New Technologies: AML/CTF Perspectives (5 Jul 2017)
B20: AMLO | FinTecha and New Technologies: AML/CTF Perspectives (5 Jul 2017)
 
From Cryptoequity to Cryptocommons
From Cryptoequity to CryptocommonsFrom Cryptoequity to Cryptocommons
From Cryptoequity to Cryptocommons
 
IRJET-Concurrency, Security Issues and Upcoming Challenges to Legal Framework...
IRJET-Concurrency, Security Issues and Upcoming Challenges to Legal Framework...IRJET-Concurrency, Security Issues and Upcoming Challenges to Legal Framework...
IRJET-Concurrency, Security Issues and Upcoming Challenges to Legal Framework...
 
Cryptocurrenty and Blockchain - SSMRV.pptx
Cryptocurrenty and Blockchain - SSMRV.pptxCryptocurrenty and Blockchain - SSMRV.pptx
Cryptocurrenty and Blockchain - SSMRV.pptx
 
Blockchain and international trade, trade finance, and supply chain (1)
Blockchain and international trade, trade finance, and supply chain (1)Blockchain and international trade, trade finance, and supply chain (1)
Blockchain and international trade, trade finance, and supply chain (1)
 

Plus de OECD Directorate for Financial and Enterprise Affairs

Plus de OECD Directorate for Financial and Enterprise Affairs (20)

OECD Competition Trends 2024 - Highlights
OECD Competition Trends 2024 - HighlightsOECD Competition Trends 2024 - Highlights
OECD Competition Trends 2024 - Highlights
 
Use of Economic Evidence in Cartel Cases – CAMACHO – December 2023 OECD discu...
Use of Economic Evidence in Cartel Cases – CAMACHO – December 2023 OECD discu...Use of Economic Evidence in Cartel Cases – CAMACHO – December 2023 OECD discu...
Use of Economic Evidence in Cartel Cases – CAMACHO – December 2023 OECD discu...
 
Ex-post Assessment of Merger Remedies – KOVACIC – December 2023 OECD discussion
Ex-post Assessment of Merger Remedies – KOVACIC – December 2023 OECD discussionEx-post Assessment of Merger Remedies – KOVACIC – December 2023 OECD discussion
Ex-post Assessment of Merger Remedies – KOVACIC – December 2023 OECD discussion
 
Ex-post Assessment of Merger Remedies – KWOKA – December 2023 OECD discussion
Ex-post Assessment of Merger Remedies – KWOKA – December 2023 OECD discussionEx-post Assessment of Merger Remedies – KWOKA – December 2023 OECD discussion
Ex-post Assessment of Merger Remedies – KWOKA – December 2023 OECD discussion
 
Ex-post Assessment of Merger Remedies – FLETCHER – December 2023 OECD discussion
Ex-post Assessment of Merger Remedies – FLETCHER – December 2023 OECD discussionEx-post Assessment of Merger Remedies – FLETCHER – December 2023 OECD discussion
Ex-post Assessment of Merger Remedies – FLETCHER – December 2023 OECD discussion
 
Ex-post Assessment of Merger Remedies – OECD – December 2023 OECD discussion
Ex-post Assessment of Merger Remedies – OECD – December 2023 OECD discussionEx-post Assessment of Merger Remedies – OECD – December 2023 OECD discussion
Ex-post Assessment of Merger Remedies – OECD – December 2023 OECD discussion
 
Use of Economic Evidence in Cartel Cases – DAVIES – December 2023 OECD discus...
Use of Economic Evidence in Cartel Cases – DAVIES – December 2023 OECD discus...Use of Economic Evidence in Cartel Cases – DAVIES – December 2023 OECD discus...
Use of Economic Evidence in Cartel Cases – DAVIES – December 2023 OECD discus...
 
Use of Economic Evidence in Cartel Cases – ROBERTS – December 2023 OECD discu...
Use of Economic Evidence in Cartel Cases – ROBERTS – December 2023 OECD discu...Use of Economic Evidence in Cartel Cases – ROBERTS – December 2023 OECD discu...
Use of Economic Evidence in Cartel Cases – ROBERTS – December 2023 OECD discu...
 
Alternatives to Leniency Programmes – SERBIA – December 2023 OECD discussion
Alternatives to Leniency Programmes – SERBIA – December 2023 OECD discussionAlternatives to Leniency Programmes – SERBIA – December 2023 OECD discussion
Alternatives to Leniency Programmes – SERBIA – December 2023 OECD discussion
 
Alternatives to Leniency Programmes – ITALY – December 2023 OECD discussion
Alternatives to Leniency Programmes – ITALY – December 2023 OECD discussionAlternatives to Leniency Programmes – ITALY – December 2023 OECD discussion
Alternatives to Leniency Programmes – ITALY – December 2023 OECD discussion
 
Out-of-Market Efficiencies in Competition Enforcement – CRANE – December 2023...
Out-of-Market Efficiencies in Competition Enforcement – CRANE – December 2023...Out-of-Market Efficiencies in Competition Enforcement – CRANE – December 2023...
Out-of-Market Efficiencies in Competition Enforcement – CRANE – December 2023...
 
Out-of-Market Efficiencies in Competition Enforcement – DAVIES – December 202...
Out-of-Market Efficiencies in Competition Enforcement – DAVIES – December 202...Out-of-Market Efficiencies in Competition Enforcement – DAVIES – December 202...
Out-of-Market Efficiencies in Competition Enforcement – DAVIES – December 202...
 
Out-of-Market Efficiencies in Competition Enforcement – ROSE – December 2023 ...
Out-of-Market Efficiencies in Competition Enforcement – ROSE – December 2023 ...Out-of-Market Efficiencies in Competition Enforcement – ROSE – December 2023 ...
Out-of-Market Efficiencies in Competition Enforcement – ROSE – December 2023 ...
 
Out-of-Market Efficiencies in Competition Enforcement – ROSENBOOM – December ...
Out-of-Market Efficiencies in Competition Enforcement – ROSENBOOM – December ...Out-of-Market Efficiencies in Competition Enforcement – ROSENBOOM – December ...
Out-of-Market Efficiencies in Competition Enforcement – ROSENBOOM – December ...
 
Serial Acquisitions and Industry Roll-ups –TZANAKI – December 2023 OECD discu...
Serial Acquisitions and Industry Roll-ups –TZANAKI – December 2023 OECD discu...Serial Acquisitions and Industry Roll-ups –TZANAKI – December 2023 OECD discu...
Serial Acquisitions and Industry Roll-ups –TZANAKI – December 2023 OECD discu...
 
Serial Acquisitions and Industry Roll-ups – GOGA – December 2023 OECD discussion
Serial Acquisitions and Industry Roll-ups – GOGA – December 2023 OECD discussionSerial Acquisitions and Industry Roll-ups – GOGA – December 2023 OECD discussion
Serial Acquisitions and Industry Roll-ups – GOGA – December 2023 OECD discussion
 
Serial Acquisitions and Industry Roll-ups – KOKKORIS – December 2023 OECD dis...
Serial Acquisitions and Industry Roll-ups – KOKKORIS – December 2023 OECD dis...Serial Acquisitions and Industry Roll-ups – KOKKORIS – December 2023 OECD dis...
Serial Acquisitions and Industry Roll-ups – KOKKORIS – December 2023 OECD dis...
 
Serial Acquisitions and Industry Roll-ups – OECD – December 2023 OECD discussion
Serial Acquisitions and Industry Roll-ups – OECD – December 2023 OECD discussionSerial Acquisitions and Industry Roll-ups – OECD – December 2023 OECD discussion
Serial Acquisitions and Industry Roll-ups – OECD – December 2023 OECD discussion
 
Competition and Innovation - The Role of Innovation in Enforcement Cases – VE...
Competition and Innovation - The Role of Innovation in Enforcement Cases – VE...Competition and Innovation - The Role of Innovation in Enforcement Cases – VE...
Competition and Innovation - The Role of Innovation in Enforcement Cases – VE...
 
Competition and Innovation - The Role of Innovation in Enforcement Cases – OE...
Competition and Innovation - The Role of Innovation in Enforcement Cases – OE...Competition and Innovation - The Role of Innovation in Enforcement Cases – OE...
Competition and Innovation - The Role of Innovation in Enforcement Cases – OE...
 

Dernier

Communication Accommodation Theory Kaylyn Benton.pptx
Communication Accommodation Theory Kaylyn Benton.pptxCommunication Accommodation Theory Kaylyn Benton.pptx
Communication Accommodation Theory Kaylyn Benton.pptxkb31670
 
Juan Pablo Sugiura - eCommerce Day Bolivia 2024
Juan Pablo Sugiura - eCommerce Day Bolivia 2024Juan Pablo Sugiura - eCommerce Day Bolivia 2024
Juan Pablo Sugiura - eCommerce Day Bolivia 2024eCommerce Institute
 
Communication Accommodation Theory Kaylyn Benton.pptx
Communication Accommodation Theory Kaylyn Benton.pptxCommunication Accommodation Theory Kaylyn Benton.pptx
Communication Accommodation Theory Kaylyn Benton.pptxkb31670
 
ISO 25964-1Working Group ISO/TC 46/SC 9/WG 8
ISO 25964-1Working Group ISO/TC 46/SC 9/WG 8ISO 25964-1Working Group ISO/TC 46/SC 9/WG 8
ISO 25964-1Working Group ISO/TC 46/SC 9/WG 8Access Innovations, Inc.
 
The Real Story Of Project Manager/Scrum Master From Where It Came?!
The Real Story Of Project Manager/Scrum Master From Where It Came?!The Real Story Of Project Manager/Scrum Master From Where It Came?!
The Real Story Of Project Manager/Scrum Master From Where It Came?!Loay Mohamed Ibrahim Aly
 
Machine learning workshop, CZU Prague 2024
Machine learning workshop, CZU Prague 2024Machine learning workshop, CZU Prague 2024
Machine learning workshop, CZU Prague 2024Gokulks007
 
Dynamics of Professional Presentationpdf
Dynamics of Professional PresentationpdfDynamics of Professional Presentationpdf
Dynamics of Professional Presentationpdfravleel42
 
Burning Issue presentation of Zhazgul N. , Cycle 54
Burning Issue presentation of Zhazgul N. , Cycle 54Burning Issue presentation of Zhazgul N. , Cycle 54
Burning Issue presentation of Zhazgul N. , Cycle 54ZhazgulNurdinova
 

Dernier (8)

Communication Accommodation Theory Kaylyn Benton.pptx
Communication Accommodation Theory Kaylyn Benton.pptxCommunication Accommodation Theory Kaylyn Benton.pptx
Communication Accommodation Theory Kaylyn Benton.pptx
 
Juan Pablo Sugiura - eCommerce Day Bolivia 2024
Juan Pablo Sugiura - eCommerce Day Bolivia 2024Juan Pablo Sugiura - eCommerce Day Bolivia 2024
Juan Pablo Sugiura - eCommerce Day Bolivia 2024
 
Communication Accommodation Theory Kaylyn Benton.pptx
Communication Accommodation Theory Kaylyn Benton.pptxCommunication Accommodation Theory Kaylyn Benton.pptx
Communication Accommodation Theory Kaylyn Benton.pptx
 
ISO 25964-1Working Group ISO/TC 46/SC 9/WG 8
ISO 25964-1Working Group ISO/TC 46/SC 9/WG 8ISO 25964-1Working Group ISO/TC 46/SC 9/WG 8
ISO 25964-1Working Group ISO/TC 46/SC 9/WG 8
 
The Real Story Of Project Manager/Scrum Master From Where It Came?!
The Real Story Of Project Manager/Scrum Master From Where It Came?!The Real Story Of Project Manager/Scrum Master From Where It Came?!
The Real Story Of Project Manager/Scrum Master From Where It Came?!
 
Machine learning workshop, CZU Prague 2024
Machine learning workshop, CZU Prague 2024Machine learning workshop, CZU Prague 2024
Machine learning workshop, CZU Prague 2024
 
Dynamics of Professional Presentationpdf
Dynamics of Professional PresentationpdfDynamics of Professional Presentationpdf
Dynamics of Professional Presentationpdf
 
Burning Issue presentation of Zhazgul N. , Cycle 54
Burning Issue presentation of Zhazgul N. , Cycle 54Burning Issue presentation of Zhazgul N. , Cycle 54
Burning Issue presentation of Zhazgul N. , Cycle 54
 

Blockchain and Competition – OSTBYE – June 2018 OECD discussion

  • 1. COLLUSION AND EXCLUSION IN CRYPTOCURRENCY MARKETS OECD COMPETITION COMMITTEE HEARING, 8 JUNE 2018 PEDER ØSTBYE, SPECIAL ADVISER NORGES BANK
  • 2. The essence of cryptocurrencies 2  Cryptography-based asset disposal – Users dispose over assets linked to register-addresses with a private key – Ownership verified with a public key – Pseudo-anonymity – Various degrees of programming features for “smart-contracts” (conditional disposal)  Decentralized operation and governance – The users validate transactions and maintain a distributed ledger (DLT) – Detection and punishment of misbehavior facilitate integrity (e.g. processing only valid transactions, preventing double spending, consented coin growth) – Bitcoin: Proof-of-Work blockchain
  • 3. Cryptocurrencies can improve competition 3  Cryptocurrencies created with the intention to compete with traditional finance? – “[w]hat is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” Nakamoto (2008)  Regulation is needed: crime prevention, consumer protection, systemic risk mitigation – But regulations should not unnecessary restrict or distort competition  We must also consider how competition can be restricted in cryptocurrency markets
  • 4. What are the relevant markets associated cryptocurrencies? 4  Cryptocurrencies provide some money functions – Medium of exchange – Store of value – Unit of account  Cryptocurrencies are separate payment systems – Compete with each other and traditional payment systems/services providers  Cryptocurrencies can be platforms for the intermediation of suitable services – Smart contracts – AI services – Data storage
  • 5. Market power in cryptocurrency markets 5  Market power within a cryptocurrency – Certain stakeholders can have market power vis-a-vis other stakeholders in a cryptocurrency – Anti-competitive alliances are possible  Market power in broader relevant markets where a cryptocurrency participate – Certain cryptocurrencies may gain a strong position in a relevant market – The stakeholders can engage in exclusionary or exploitative practices
  • 6. Market power within a cryptocurrency 6 Some stakeholders in a cryptocurrency  Operators – Users who perform validation and maintain the cryptocurrency’s integrity  Code-developers  Input providers – Software, hardware, electricity, communication providers, financial service providers  Normal users – Those who use the cryptocurrency as intended
  • 7. Market power within a cryptocurrency 7 Some examples of possible anti-competitive actions  Agreements and collusion – Collusion both for exclusion and exploitation – Mining pools – Vertical restraints between operators and input providers  Unilateral conduct – Excessive transaction fees – Exclusion transactions by certain users or of blocks validated by certain validators  Mergers – Purchase of coins/tokens – Purchase of mining equipment – Vertical integration of stakeholders, e.g. operators and input providers
  • 8. Market power in broader relevant markets 8 Some stakeholders  Stakeholders within the various cryptocurrencies  Wallets and exchanges  Payment services providers  Financial infrastructures  Banks  Internet/communication providers
  • 9. Market power in broader relevant markets 9 Some possible anti-competitive actions  Agreements and collusion – Collusions between stakeholders in different cryptocurrencies – Exclusive agreements between stakeholders in a cryptocurrency and third- party providers – Exclusive agreements between internet/communication providers and cryptocurrency stakeholders  Unilateral conduct – Exchanges, wallets or payment services providers may obtain a dominant positions and discriminate against certain cryptocurrencies  Mergers – Cross ownership in cryptocurrencies – Banks, traditional payment services providers, or internet providers might acquire control over cryptocurrencies and associated platforms
  • 10. Challenge 1: methodology 10  The governance structure of a cryptocurrency is very different from a usual firm – How to specify profit functions?  How to analyze competition and assess market power? – How can cryptocurrency operators possess market power? – How to measure market power?  Is the traditional industrial organization workhorse sufficient? – Textbook IO models may not be useful representations – New forms of co-opetition – How do network effects play out? – Must competition authorities learn more «cryptoeconomics»?
  • 11. Challenge 2: competition law application 11  Substantive issues – Who can be liable according to comeptition law? – Distinguishing coordination and unilateral behavior (e.g. are validators acting unilaterally or coordinated when complying with protocols)? – How to determine dominant position/monopoly power? – What is a merger?  Enforcement issues – How to deal with pseudo-anonymous operators? – How to deal with cross-jurisdictional operations? – What are the right remedies?