Innovation Competition in the Generative AI Space: Future-Proofing Competition Policy (Again)?

Competition authorities worldwide are increasingly concerned about the entrenched market dominance of a few large tech companies in GenAI-related markets. The paper suggests an evolutionary approach to grasp innovation and competition dynamics, exploring different ‘Schumpeterian scenarios’ and their relevance to GenAI. It emphasizes the potential risks posed by strategic partnerships between Big Tech firms and AI providers, which could stifle innovation and competition. The study underscores the necessity for swift enforcement actions and advocates for a proactive utilization of the entire competition policy arsenal, encompassing merger control and the prohibition of anticompetitive horizontal and vertical agreements, as well as of abuses of dominant position, to ensure robust and sustainable innovation competition in the GenAI space going forward.