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Basic concepts of competition in the digital economy

Published on: January 7, 2025

Digital Economy

Prepared by:
General Directorate of Digital Markets


Summary

Basic Concepts of Competition in the Digital Economy explores the fundamental principles that shape competition in digital markets, emphasizing the role of multi-sided platforms, network effects, economies of scale and scope, and data-driven decision-making. Published by Cofece, this report highlights the benefits of competition, such as market expansion, cost reduction, and innovation, while also addressing potential risks like abuse of dominance, entry barriers, and data monopolization. The document underscores the increasing relevance of artificial intelligence, personalized pricing, and algorithm-driven competition, shaping the future of the digital economy. Understanding these dynamics is essential for business leaders, policymakers, and consumers navigating the evolving digital landscape.

Keywords: Cofece, digital competition, multi-sided platforms, big data, market power, network effects, digital markets, personalized pricing, competition policy, economies of scale, economies of scope, AI in competition, online marketplaces, digital platforms, innovation, data-driven competition, abuse of dominance, entry barriers, algorithm-driven competition, market expansion, cost reduction, consumer protection, digital economy, data monetization, regulatory policies, switching costs, digital ecosystems.


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