Implications of behavioural economics for the pro-competitive regulation of digital platforms

Expert economists Zita Vasas (Compass Lexecon) and Amelia Fletcher (UEA) co-authored a paper in the latest edition of the Oxford Review of Economic Policy, exploring how choice architecture on digital platforms can influence DMA compliance and market competition. The authors analyse the growing role of behavioural economics and choice architecture, with a focus on their implications for competition policy under the EU's Digital Markets Act.

The views expressed in this text are the sole responsibility of the authors and cannot be attributed to Compass Lexecon or any other parties.

Abstract

In recent years, the relevance of behavioural economics to competition policy has become ever more apparent, especially in digital markets. Choice architecture, which shapes how consumers make decisions online, has been at the centre of numerous recent legal cases brought under competition law, as well as the development of regulations at promoting competition in markets currently dominated by major tech platforms. This article focuses on the impact of behavioural insights for the design and implementation of one such regulation, the EU’s Digital Markets Act (DMA). It underscores the relevance of choice architecture to several DMA provisions and emphasizes the necessity of testing different designs—through online experiments, field trials, and surveys—to ensure compliance. Despite their seemingly minor effects today, such improvements to choice architecture could prove pivotal in fostering competitive markets.

Read the full paper here.