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The rise of dominant digital platforms presents a generational challenge to competition enforcers and, potentially more broadly, to the health and dynamism of our economy. In the past, many monopolists exerted control primarily over their own core products and services. Today’s digital giants, however, can to a greater degree use their gatekeeper positions to pick winners and losers in adjacent markets, discourage switching to rival services, and punish entrepreneurs that come too close to the platform’s domain. Moreover, digital platforms are becoming more common throughout the economy in industries beyond consumer technology, such as healthcare, energy and finance, underscoring the need for a coherent approach attuned to market realities. Platforms, however often defy simple horizontal competition and vertical distribution relationships. As a result, in addition to the antitrust concerns evident in traditional industries, competitive threats to digital platforms may also present in particular ways. The competition will often emerge in the form of disruptions that reduce dependence on the platform or undermine the network effects or moats that protect the platform’s dominant position. For that reason, platforms’ anticompetitive attempts to retain their position often target competitive threats, not just direct competitors.

Issue Section:
Agency Insight
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