What if Disruption Really Happens—Are Competition Law and Digital Regulation Fit for a New Era of AI-Driven Competition?
Jan-Frederick Göhsl
What the paper says
This paper explores the effect of AI-driven business models on competition in digital markets. It argues that although disruptive innovations are emerging, they may not lead to Schumpeterian creative destruction and improved market contestability. Newcomers’ innovations often create new (market) demand (‘new market disruption’), which they can control independently of incumbents. Therefore, following a disruption, it is possible that both the incumbent with its legacy service and the innovative newcomer will remain in the relevant market (segments). Consequently, after disruption, both incumbents and innovative challengers may coexist, potentially limiting contestability from two angles. This paper analyses, from a competition policy standpoint, whether and how competition law and digital regulation should address the behaviour of successful newcomers. It is argued that, in addition to competition law, the rules of the Digital Markets Act for newcomers set out in Article 17(4) DMA should be applied to protect the competitive process and prevent newcomers from engaging in practices that could lead to market tipping. However, it is also shown that neither the DMA nor competition law are currently fully equipped to deal with disruptive newcomers.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.