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Market power is a fundamental concept for competition law and policy: it can make the difference between procompetitive and abusive firm conduct, and the difference between beneficial and harmful mergers. In the wake of digitalisation, it has become a particular concern: evidence such as growing mark-ups suggests that market power is on the rise, and potentially becoming more durable, in digital-intensive sectors.
The assessment of market power in digital markets can present a range of challenges for authorities.
In June 2022, the OECD discussed some of these key challenges, including:
- How should the competition analysis of market power be adapted to digitalisation? For instance, should particular contributors to market power, such as specific entry barriers, play a more prominent role?
- Is there a need for the concept of market power to be broadened or supplemented to address specific concerns in digital markets? For example, does the concept of market power need to be adapted to digital platform business models? Or, alternatively, do the competition concerns in the wake of digitalisation continue to have market power at their core?
- How do new proposed designations of firms, such as gatekeepers or bottlenecks, relate to established concepts of market power? Why are they needed, and what do they imply for the relevance of the concept of market power in digital markets?
- How will new concepts and legislative definitions related to market power interact with existing enforcement frameworks?
The discussion explored:
- how agencies are assessing market power in the digital economy, including how they approach concepts like network effects or multi-homing
- some new approaches and alternatives to market power as a competition law concept
- new digital sector regulations and their relationships to traditional market power.
All related documentation are available on this page.
See the full list of best practice roundtables on competition.
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