Domination and mergers of digital platforms : Do competition authorities have to regulate ?

Luis Campos

The analysis of the competitive dynamics between digital platforms is not identical to that applied for other markets. Three elements require that they be different. First, digital platforms operate in markets that connect several users and offer several services. This requires that the analysis of competitive dynamics takes into account the diversity of users and services. On the other hand, digital platforms benefit from network effects: direct network effects-the value of the service offered by the digital platform depends on the number of users of the same service offered by the platform-and indirect network effects-the value of the service offered by the digital platform depends on the number of users of the other services offered by the platform. The importance of these network effects results in a phenomenon of concentration. Network effects mainly benefit established platforms. Finally, competition between rival digital platforms is mainly exercised by differentiating the services offered to users, or even by proposing different business models. Although price is not indifferent, service differentiation is often a more important competitive tool.