Digital Transformation and the Reshaping of Competition Rules in Multi-Sided Digital Markets: A Comparative Analytical Study

Abstract

This study examines the implications of digital transformation for the legal and economic structure of competition by analyzing how emerging technologies have reshaped markets with distinctive characteristics that fundamentally differentiate them from traditional markets. These characteristics include, most notably, network effects, the extensive reliance on data as a strategic asset, economies of scale, and multi-sided business models. Such developments have given rise to new forms of market power that are no longer determined solely by price or market share but are increasingly associated with the ability to collect, analyze, and exploit data to reinforce market power, design algorithmic architectures, and control the flow of users' attention. These developments have exposed the limitations of traditional competition law analytical tools in capturing and assessing these emerging forms of market power.

The study further analyzes the impact of digital transformation on the concepts of the relevant market and market power, assessing the suitability of conventional market definition tests in the context of multi-sided digital markets while highlighting the growing importance of non-price parameters in evaluating economic dominance. It also examines the challenges faced by competition authorities in detecting anti-competitive practices in digital environments, particularly given the complexity of algorithmic systems, widening information asymmetries, and the emergence of new forms of economic power that do not necessarily depend on prices or traditional market shares.

Finally, the study analyzes the European legislative framework governing digital markets and compares it with the Egyptian legislative framework to assess the latter's adequacy in addressing the challenges posed by digital markets. Based on this comparative analysis, the study proposes a set of recommendations aimed at strengthening the legislative framework to achieve an effective balance between safeguarding competition and fostering innovation in the digital economy.