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2 results

  • 4 - Digital Platforms: A New Natural Monopoly?

  • from Part I - The Competitors in the Digital Network Industry
  • Jasper van den Boom, Leiden University
  • Book:
    Regulating Competition in the Digital Network Industry
    Published online:
    20 November 2025
    Print publication:
    04 December 2025, pp 85-112

  • Summary

    Network industries often exhibit natural monopoly in certain markets. Here, natural monopoly is generally attributed to high sunk and fixed costs paired with low marginal costs. This chapter explains that digital platform markets are prone to concentration not only due to this combination of fixed and marginal costs but also due to self-reinforcing feedback loops that reinforce the dominance of the largest platform operators. Platform monopoly is persistent, entrenched, and the result of structural competition issues. However, even if digital markets exhibit heavily imperfect competition or natural monopoly, competitive pressures persist as there is competition at the ecosystem level. This sets apart digital platform monopoly from non-digital natural monopoly and means that regulating these markets should happen on the basis of different principles.

Regulating Competition in the Digital Network Industry
  • Jasper van den Boom
  • Published online:
    20 November 2025
    Print publication:
    04 December 2025
  • This book proposes a wholly new view on digital competition. Digital firms compete to capture parts of the digital network industry. Once they control access points for competition, they get to decide who gets to compete and how. With their superior access to information and users, incumbents become the de facto regulators of their part of the digital network. Regulation that focuses on markets cannot capture these dimensions of power and competition. The system of Progressive Ecosystem Regulation proposed in this book explains how ecosystem competition can be stimulated to create meaningful competitive pressures, open up the network, and introduce real choice for users.