Market Power of Digital Platforms

Market Power of Digital Platforms

Jens-Uwe Franck

University of Mannheim - Department of Law

Martin Peitz

University of Mannheim - Department of Economics

Abstract

Digital platforms have reshaped many product markets and play an increasingly important role in economies around the globe. Some of these platforms have become powerful players and may possess a lot of market power. Economists use a number of indicators to assess market power. In this article we discuss to which extent these indicators are helpful in the context of digital platforms. In particular, we focus on assessing entrenched market power and the role of potential competition to constrain this power. Finally, we discuss some cross-border issues of platform market power.