Over the course of a single day, most consumers will come into contact with at least one product that is offered to them at a price of zero. Business models centred around the zero-price provision of products are not new. However, in the digital economy, new zero-price markets have arisen with their own unique characteristics and vast scope.
The OECD held a discussion in November 2018 to cover several particular challenges associated with quality in zero-price markets, including:
Identifying what constitutes a dimension of quality competition in a zero price market. These can, depending on the market, include privacy, exposure to advertising content, or ease of switching.
Overcoming the challenges associated with competition analysis in the zero price economy. Competition authorities may have to adapt their analytical tools in the absence of monetary prices.
Addressing demand-side concerns in the zero-price economy. These range from the potential for deceptive or unfair contract terms, to information asymmetries causing market failures, to consumer biases in decision-making. Cooperation between competition, consumer protection and data protection authorities, as well as sector regulators, will be needed to diagnose demand-side problems and develop procompetitive, consumer welfare-enhancing solutions.
The discussion was held during a joint meeting of the OECD Consumer Protection and Competition committees. All related materials for the discussion are available on this page.