The OECD is suggesting a series of policies applied to private or permissioned blockchain networks to avoid anti-competitive and monopolistic behavior within these networks.
Según un report published by the Organisation for Economic Co-operation and Development (OECD), entitled «Antitrust and the trust machine», state regulators must venture into, integrate and participate within the different private or permissioned blockchain networks, in order to mitigate the existing risks in relation to monopoly. For the organization, the technology blockchain It offers a great alternative to traditional technologies, or to business models that create trust, since in most of these networks the participation of an intermediary or trusted third party is not necessary.
However, the OECD points out that this feature is present within public and decentralized blockchain networks, where any user can become a node or validator of the network and participate in its consensus; while in permissioned, or private, blockchains, certain restrictions apply, so not everyone can have access to them. In this sense, the OECD highlights that in permissioned blockchain networks, the concept of trust is returned to, where third parties are needed to handle and manage internal information. This aspect means that authorized users can adopt "anti-competitive and monopolistic" behavior.
And although the organization notes that its report is based on the work done by Pike & Capobianco (2019), which does not necessarily represent its ideal and point of view, it is clear that the OECD seeks to stimulate debate on this topic, and encourage regulators to enact new antitrust legislation within these blockchain networks.
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Blockchain and its users
As the text indicates, the participation that users have within these blockchain networks can be completely different in decentralized networks and private networks. For example, the OECD points out that in public blockchains, the availability of validators, or participants, is vast; while in private blockchains, much more reliable validators are sought and selected. However, the organization highlights that in both, the security features, price and verification speed must be attractive and competitive, in order to attract more validators to its network and maintain a natural balance.
The OECD also indicates that a competitive analysis of the impact of blockchain technology requires the study of different markets, including upstream markets, input markets and downstream retail markets, in addition to the markets in which blockchain networks compete with each other and the links between them. This practice, or methodology, ensures that there is fair competition between the different networks, and in the event of irregularities that favor one over another, or that set excessive prices within a blockchain network, the OECD believes that the “direct intervention of a competition agency” is appropriate.
Risks of anti-competitive and monopolistic behavior
“The nature of blockchain technology creates a number of risks with regard to anti-competitive behavior by those who control the blockchain.”
The organisation highlights the need to control any “abuses” or “exploitation” that may occur within a permissioned blockchain network, such as the aforementioned case of “excessive transaction pricing”, which can be challenged and controlled by agencies if they participate. Similarly, the OECD argues that the intervention of regulators within these networks can allow for control or direct intervention by a competent body, provided that it is empowered to act to resolve the identified problems.
In short, the organization aims to generate a debate so that regulators become aware of the importance that their participation within permissioned blockchains can have, and to be able to regulate or control the activities carried out there. According to the organization, regulators and competing agencies "must have a node in these blockchains."
About the OECD
The OECD, an organization made up of 36 of the most economically developed countries in the world, has maintained a somewhat confusing attitude towards the cryptocurrencies, and new developments. On the one hand, this organization points out that cryptocurrencies are an opportunity for the global economy, while also arguing that they represent a potential risk. As for blockchain, it points out that it is a technology with exciting potential, but that due to its characteristics it can raise concerns within traditional markets.
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