Digital platforms are characterized by their network effects and multi-sidedness (often with consumers on one side of the platform and suppliers on the other side). Competition is affected by high switching costs, economies of scale and levels to control data. These elements all play essential roles when finding the relevant market.
With regard to digital platforms, there is a consensus that products on each side of a platform have a different degree of substitutability. EE&MC uses established instruments such as the hypothetical monopolist test, which originally uses a price mechanism for market delineation, in an adapted manner for market definition in the digital economy.
In the digital economy, instead of simulating a price increase, the economic impact of a quality reduction is observed and measured. To define multi-sided markets, the data flows that can be observed in the market are also analysed.
EE&MC has been applying this adapted methodology in a range of cases and has distinctive experience in market definitions in digital markets.