Defining Relevant Markets in Digital Ecosystems

Traditional market definition focuses on the substitutability of two products or geographies. In digital ecosystems, competition often occurs in important ways that elide definition in conventional substitutability terms. This Article considers three kinds of economic rivalry that do not fit the conventional market definition mold: (1) Single-side competition: In twosided markets, firms may compete on just one side of the market. For example, Google and Facebook compete for the same advertisers, but their users on the other side of the market do not necessarily think of the offerings (social media and universal search) as substitutes; (2) Ecosystem competition: Technology companies often compete with other firms to define which nodes in a digital ecosystem are differentiated or commoditized. For example, Apple and Amazon competed fiercely over the e-books ecosystem to determine whether value would reside primarily in retail distribution or tablets; (3) Capacity competition: Firms compete for dominance in technological capacity that does not yet have certain applications. For example, firms are in an arms race for supremacy in a variety of emerging technologies such as artificial intelligence, artificial general intelligence, quantum computing, robotics, and (more remotely) nanotechnology where the potential applications (and hence markets in an antitrust sense) are myriad and as of yet unknown. These three examples provide impetus to design new legal-analytical toolkits for identifying competition in digital ecosystems.