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Competition and regulation in the digital economy

Project description

Digital economy’s impact on competition and regulation

The role of the digital economy in modern societies is increasingly shaping industries and introducing new market dynamics. However, these developments challenge the traditional approaches to competition policy and regulation. The EU-funded DIGECON project will conduct innovative research aiming at the increase in competition between ecosystems involving multiple products and actors. It will also focus on platforms’ competition, as well as on the impact of digital revolution competition and cooperation along the vertical chains of production and distribution. Moreover, the project will investigate how data raises questions concerning the interplay between business strategy and consumer privacy.

Objective

The digital economy is of growing importance for society, but its development challenges the traditional approaches to competition policy and regulation, based on a benchmark of perfect competition that regulatory authorities aim at approaching in the various relevant markets. Economies of scale and scope are more the rule than the exception, network effects and multi-sidedness are pervasive, information and data are shaping industries, the boundaries of the markets are becoming blurred, and industry dynamics are on a new scale. These features make the perfect competition benchmark and the focus on individual markets less relevant, calling for a new conceptual framework for the analysis of competition in the digital economy.
The proposed research aims at breaking new ground on four related fronts. First, competition in the digital economy is increasingly between ecosystems involving multiple products and, often, multiple actors. Second, platforms compete for consumer attention, raising questions about consumer behaviour and platforms’ ability to influence it. Third, the digital revolution has drastically affected the way firms compete and cooperate along the vertical chains of production and distribution. Finally, the role of data raises questions not only about the interplay between business strategy and consumer privacy, but also about how the quest for data can shape entry and competition in product markets.
On each theme, several avenues are proposed to enhance our understanding of how competition works in the digital era; the insights will shed light on desirable changes for competition policy and regulation – interpreted in a broad sense, including policies that affect the functioning of digital markets such as consumer or privacy protection policies.

Host institution

FONDATION JEAN JACQUES LAFFONT,TOULOUSE SCIENCES ECONOMIQUES
Net EU contribution
€ 1 443 750,00
Address
5E ETAGE, 1 ESP DE L'UNIVERSITE
31080 Toulouse
France

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Region
Occitanie Midi-Pyrénées Haute-Garonne
Activity type
Research Organisations
Links
Total cost
€ 1 943 750,00

Beneficiaries (3)