In the digital economy, the detection of abusive exploitation of market power is a particular challenge. Economic analyses in digital markets are complex and abusive effects often cannot be identified with usual methods and techniques. These traditional tools need to be adjusted.
Professor Hildebrand's current research focus at the Universities of Sorbonne and Nanterre, Paris, is market definition and market power assessment in digital markets. A scientific specialisation that can be crucial in complex competitive economic analyses of digital markets in practice. EE&MC clients benefit from Professor Hildebrand's expertise and research on dynamic digital market simulation models based on artificial intelligence (AI).
Digital platforms use algorithms to collect and process large amounts of data. The processed data are used to launch new business models. A particular advantage of digital platforms are data-driven network effects. These effects, as well as the economies of scale and scope and the control of the data itself, create high barriers to entry. New entrants can no longer enter the market after a certain point, the "tipping" point. Market entry is further complicated by the fact that digital platforms have high upfront sunk costs while marginal costs are low. This cost structure accelerates the already existing economies of scale and scope and facilitates the market concentration of "Big Data" in the hands of a few players. This particular constellation leads to successful digital platforms quickly assuming a leading position that can hardly be contested.
The current approach to evaluating the leading platforms uses the consumer welfare standard, especially in the US. This standard of review measures consumer benefit or harm in terms of lower or higher prices. The difficulty regarding the application of the consumer welfare standard in the digital economy is that solid price analyses for online platforms are hardly feasible due to rapid price fluctuations and personalised pricing favoured by algorithms. Furthermore, price is not the most appropriate criterion in the competitive analysis of online platforms, as many services are offered for free. In fact, consumers pay by providing personal data. The German Federal Court of Justice recognised this connection in its Facebook ruling and focused on the citizen: this may be the birth of the "citizen" welfare standard or "citizen welfare" standard. Digital markets are shifting boundaries, also in competition economics. In the US, recently the battle against the use of the consumer welfare standard is exalerating too.
EE&MC benefits from the academic work of Professor Hildebrand on this topic. Her studies make it clear that for an adequate assessment of competition economics in the digital economy, other characteristics than just the prices of products or services should be included in the analysis.