A New Approach Toward the Understanding of Dominance in the Digital Era: Assessing Dominant Position in Dynamic Markets

Abstract

In this article, we will first assess whether market share can still be considered as an adequate or suitable indicator for ascertaining dominance in dynamic markets, given that the market forces and competitive parameters that prevail in dynamic markets differ significantly from the traditional markets to which the static ‘price competition’ approach applies. Subsequently, we will examine the potential new approaches and parameters that should be taken into account for assessing whether an undertaking active in dynamic markets is actually in a dominant position in those markets. In this regard, we will begin our analysis by first explaining the establishment of "dominant position” in the European and Turkish competition law regimes with regard to sectors and industries with traditional market characteristics. We will then scrutinize and evaluate the structural differences between traditional and dynamic markets by emphasizing the heightened role and increased impact of innovation on the latter. As the traditional methods utilized by competition enforcement authorities are based on the traditional understanding of markets, which depends on certain assumptions regarding static market characteristics, we will seek to demonstrate that adopting or implementing the conventional approach with regard to the market positions of undertakings that are active in dynamic markets could mislead the competition authorities and cause them to reach flawed results that do not reflect the realities of the new marketplaces in the modern global economy.

Keywords: dominant position, online markets, marketplaces, dynamic markets, abuse of dominance, antitrust

JEL Classification: K21, L40