Luxembourg Antitrust Authority to investigate competition in Blockchain and Web3.

The Luxembourg competition authority has announced that it will conduct a market study on blockchain technology. This study could be the first of its kind to investigate the economics of Web3.

The government of this European Union member, which is a significant financial center despite its small size, considers the technology that underpins cryptocurrencies to be crucial for the digital and environmental transition.

“Given the strong potential of the sector, it’s important to ensure that Web3 actors can develop in a market that is effective and competitive,” said the Autorité de la concurrence in a statement.

Competition market studies collect information from companies active in a sector about how a particular market works and can serve as the basis for further enforcement actions for breaches of antitrust rules such as abuse of a dominant position.

The regulator stated that this study will investigate the areas where newer blockchain-based companies compete with existing Web2 internet companies and document potential anti-competitive practices implemented against Web3 projects.

Thibaut Schrepel, an associate professor at the University of Amsterdam who will help with the investigation as an external expert, told CoinDesk that this project could break new ground.

“To the best of my knowledge, it’s the first market study conducted by a regulatory agency whose goal is to protect Web3, not to attack it,” Schrepel said.

The European Commission is expected to issue a policy paper on the metaverse later this year, which is anticipated to consider options if major companies such as Meta Platforms (META) squeeze out smaller rivals.

Read more: EU Antitrust Officials Are Worried About Competition in the Metaverse

Edited by Sandali Handagama.

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