Abstract:

The digital economy has a number of characteristics which may produce both pro and anticompetitive outcomes. On the one hand, digital markets are generally perceived to benefit consumers through lower prices, increased transparency and improved product quality. On the other hand, they also have a certain tendency towards market concentration. Because of these characteristics, competition Authorities are faced with traditional enforcement challenges, albeit in a refined way. In the presence of highly concentrated markets, it may indeed be tempting for the Authorities to infer abusive conduct from mere market power, which may lead to over-enforcement or over-regulation. Conversely, in the presence of disruptive innovation and fast-evolving markets, the Authorities might place too great a reliance on the alleged contestability of digital markets, which may lead to the opposite risk of under-enforcement. Finally, digital markets may raise novel competition concerns which require a refinement of the legal and economic concepts traditionally used by the competition Authorities, in particular for the measurement of market power and for the assessment of innovative pricing strategies. Drawing upon the recent decision-making practice of the French Competition Authority, this article provides a brief account of some of the challenges raised by the application of competition rules in the digital economy.

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