Economic Power and New Business Models in Competition Law and Economics: Ontology and New Metrics

46 Pages Posted: 6 Apr 2021

See all articles by Ioannis Lianos

Ioannis Lianos

University College London - Faculty of Laws

Bruno Carballa Smichowski

Joint Research Centre (European Commission); Centre d’Economie de l’Université Paris Nord (CEPN) – UMR 7234 CNRS-Université Sorbonne, Paris 13.

Date Written: March 15, 2021

Abstract

The digital economy has brought new business models that rely on zero-price markets and multi-sided platforms that exploit broad business ecosystems. The traditional concept of market power used by competition authorities cannot engage with this new reality, which is more multidimensional than the usual focus on price (and output). A number of jurisdictions also try to grapple with the broader concern over the bargaining power of large digital platforms and the rise of gatekeepers in the digital economy. These developments have culminated in the recent calls for a more multidimensional concept of (economic) power, in particular in the context of competition law enforcement against unilateral conduct and suggestions over new concepts of power triggering antitrust/regulatory intervention, such as “strategic market status”, “conglomerate market power, “intermediation power”, “structuring digital platforms”, or “gatekeepers” to complete, or even substitute, the archetypical concept of market or monopoly power in competition law.

The multiplication of new concepts of power signals the creativity and flexibility of the competition law enterprise as it seeks to take into account new economic realities. However, what is crucially missing is an overall theoretical framework for this multi-dimensional concept of power, taking into account this new reality arising out of the use of new business models in ecosystems. We aim to fill this gap in our conceptual understanding by putting forward an ontology of (economic) power which integrates these new dimensions. This is completed with a more ‘empirical’ perspective exploring the various ways these new dimensions of power can be measured. We thus recognize the importance of culminating this concept-building approach with the more practical undertaking of developing adequate new metrics that guide and, by the same, limit administrative discretion in enforcing competition or regulatory law.

Keywords: economic power, market power, ecosystems, value chain, digital, dominant position, gatekeeper, power metrics

JEL Classification: K21, L1, L12, L4, L41, L5, L86, L88, M21

Suggested Citation

Lianos, Ioannis and Carballa Smichowski, Bruno, Economic Power and New Business Models in Competition Law and Economics: Ontology and New Metrics (March 15, 2021). Available at SSRN: https://ssrn.com/abstract=3818943 or http://dx.doi.org/10.2139/ssrn.3818943

Ioannis Lianos (Contact Author)

University College London - Faculty of Laws ( email )

London
United Kingdom

Bruno Carballa Smichowski

Joint Research Centre (European Commission) ( email )

Centre d’Economie de l’Université Paris Nord (CEPN) – UMR 7234 CNRS-Université Sorbonne, Paris 13. ( email )

France

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