Digital and Non-digital Network Industries

Cambridge University Press eBooks, pp. 52–84

Abstract

Digital markets are part of a network industry. Competition is not confined to competing within a market. Instead, there is competition for and across markets. Network industries are generally prone to concentration due to network externalities, economies of scale and scope, and the existence of natural monopoly in some markets associated with the network. These bottlenecks impact competition throughout the network. The digital network industry is similarly characterized by cross-market dependencies. Operators of digital ecosystems are able to carve out a part of the network where they can act as the de facto regulator of that part of the network, as they control access points and set the terms and conditions for competition on their platforms.

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