In light of the rapid growth and unique challenges of digital markets, the Center for Development and Competition Studies (BANAELC) has undertaken a structured and phased initiative research to regulate and oversee Iran’s digital economy. The overall goal is to establish a comprehensive regulatory framework that ensures fair competition, fosters innovation, and accommodates the complexities of the modern digital landscape. This initiative is accompanied by contribution of the significant digital players in Iran. The following outlines the phases of this ambitious project, detailing the scope, focus, and implementation strategies.

Phase 1: Comparative Study of Digital Economy Regulation

The first phase of the project was centered on a comparative analysis of digital economy regulations in pioneer jurisdictions. This study aimed to identify best practices and lessons learned from global leaders in digital market regulation, providing a foundation for tailored regulatory strategies in Iran. The focus has been on three key regions and countries:

1.      European Union (EU): Known for its proactive approach to digital market regulation, particularly through the Digital Markets Act (DMA), the EU offers insights into managing large platforms, addressing monopolistic practices, and safeguarding consumer rights.

2.      Germany: As a leading EU member state with a robust competition framework, Germany’s experience with regulating dominant digital platforms, including preventive measures against abuse of market power, provides valuable case studies.

3.      China: With one of the world’s largest and fastest-growing digital economies, China’s regulatory strategies for overseeing tech giants and fostering innovation, alongside curbing anti-competitive practices, offer critical insights for Iran’s digital transformation.

The findings of this comparative study served as the groundwork for adapting global practices to Iran’s unique economic, legal, and technological context. By understanding how these jurisdictions have tackled challenges such as data monopolies, platform dominance, and algorithmic collusion, BANA was able to design a framework that balances innovation with fair competition.

Phase 2: Analysis of Iran’s Digital Markets

·        Part One: General Market Assessment

The second phase focused on a comprehensive evaluation of Iran’s digital markets, examining their current structure, key players, and prevailing challenges. This analysis aimed to uncover issues such as market concentration, and barriers to entry in Iran’s current economy.

·        Part Two: Case Study on Snapp

A significant portion of Phase 2 involved an in-depth examination of Snapp, Iran’s leading ride-hailing and multi-service platform. As a dominant player in the country’s digital economy, Snapp represents a critical case study for understanding market dynamics, competition challenges, and potential regulatory gaps. Specific areas of focus included:

• Market Power and Dominance: Assessing Snapp’s position in the market, its interactions with smaller competitors, and any practices that may inhibit fair competition.
• Data Utilization: Evaluating how Snapp leverages user and market data, particularly in ways that could either promote or stifle innovation and competition.
• Barriers to Entry: Identifying obstacles that new competitors face when attempting to enter markets dominated by Snapp.

In this phase, BANA applied advanced analytical tools and methodologies to provide a detailed and objective assessment of Iran’s digital economy.

Phase 3: Drafting a “Competition Guideline for Digital Market”

The final phase involved the development of a comprehensive regulatory framework for competition in digital markets. This phase consisted of two main outputs:

1. Drafting a Competition Guideline for Digital Market

This guideline aimed to strike a balance between fostering innovation and promoting sustainable growth in Iran’s digital economy by establishing criteria for identifying anti-competitive behaviors and implementing corrective measures, as well as addressing emerging challenges such as algorithmic pricing, data monopolization, and platform dominance.

2. Providing a Supporting Document for the Regulatory Framework

To complement the draft guideline, a detailed supporting document has been prepared by BANA. This document provided the research findings, and evidence underpinning the proposed regulatory measures. It included:

·        Insights from the comparative study conducted in Phase 1.

·        Findings from the analysis of Iran’s digital markets in Phase 2.

·        Legal and economic justifications for each proposed regulatory measure.

The supporting document was intended to serve as a reference for policymakers, ensuring that the regulatory framework is grounded in both global best practices and the realities of Iran’s market conditions.

A Collaborative Approach

The phased initiative reflects a collaborative effort between multiple players, including BANA and many Iranian digital platforms. By involving diverse perspectives, the project aims to create a robust and forward-looking regulatory framework.

Conclusion

The emerging of developing digital economy presents unprecedented opportunities as well as challenges for Iran’s digital market. Through comparative studies and research, BANA seeks to propose a regulatory framework to support innovation, protect consumers, as well as ensure fair competition. By learning from global experiences, analyzing domestic markets, and developing tailored regulatory tools, BANA  has taken critical steps toward shaping a dynamic and competitive digital economy that benefits all participants and players.