Hard vs. Soft Law in Regulating Competition in Digital Markets

Abstract This article explores the dynamics of legal convergence and compares the use of soft law and hard law as instruments of legal harmonization of competition law in response to global market digitalization. This paper uses a law and economics lens to analyze legislative harmonization, especially transaction costs, the costs associated with understanding and complying with existing legislation by global players and businesses. In addition, the role of democratic legitimacy and the technocratic nature of competition law are explored, especially due to the observation of a global regulatory scenario influenced by the Brussels Effect and other political issues. By analyzing and comparing the characteristics, costs, and advantages of soft and hard law, the paper concludes that the use of soft law is a practical approach to help countries quickly respond to anti-competitive behavior in digital markets with fewer costs and, at the same time, in a cooperative movement, not to add extra fees to the global market players.