Mitigating Antitrust Concerns when Competitors Share Data Using Blockchain Technology
Harvard Journal of Law & Technology, Volume 34, Digest Spring 2021
Writing in the Harvard Journal of Law & Technology, Principal Almudena Arcelus, Managing Principal Mihran Yenikomshian, and Associate Noemi Nocera discuss antitrust concerns that have been raised by the introduction of the distributed ledger technology blockchain into a wide array of business processes. Blockchain is most widely known as the technology underlying cryptocurrencies, such as Bitcoin, but companies in many other industries have been applying the technology to redefine the way they do business, including design of supply chains and smart financial contracts.
In their article “Mitigating Antitrust Concerns when Competitors Share Data Using Blockchain Technology,” the authors explain that blockchain technology’s sophisticated encryption methods provide a secure and efficient way to transmit sensitive data, making it very useful for conducting transactions or collaborating between competitors. However, that same security around information sharing can raise legitimate competition concerns in regulators’ eyes if it increases the risk of enabling anticompetitive practices such as collusion or price-fixing, abuse of dominance, information exchange, exclusion, and standard-setting.
After providing an overview of blockchain technology, its business applications, and its antitrust risks, the authors discuss three sets of network design strategies that can help alleviate competition issues arising from the adoption of the technology. They conclude by emphasizing the importance of understanding the specific implementation of the technology to distinguish between legitimate applications of information sharing and potentially anticompetitive practices.