The Challenges of Blockchain Technology to Competition Law

Abstract

Blockchain is a catch-all term for a combination of three technologies: distributed ledger, cryptology and network protocols. The first enables storing the same info in different places, the second allows secure transactions to be recorded and then encrypted on the distributed ledger. The third element governs the network and verifies transactions across the network automatically and independently. Considered by many as “the biggest technological innovation since the Internet”1, blockchain is a decentralized, more secure and transparent model for transactions that operates on an encrypted peer-to-peer basis. This model makes trust between parties superfluous by instead placing trust in the underlying technological platform. This would effectively remove the need for intermediaries whose business has been to make up for the lack of trust; these include banks, brokers, governments, internet platforms, law firms etc. While reducing the costs of contract enforcement and thus facilitating trade, blockchain technology may have significant implications for antitrust law. As decentralized organizations such as blockchain are not recognized as legal persons, this raises questions about whether anticompetitive practices and their perpetrators can be identified. For example, can a non-entity hold a dominant position? Can blockchain create a “monopoly without a monopolist”? Finally, if a blockchain is dominant, which users and/or entities hold that dominant position? This article intends to highlight the challenges that blockchain presents to the analyses of unilateral anticompetitive practices.