Digital platforms have boosted consumer welfare and driven innovation and competition by integrating diverse technological advancements. These online platforms facilitate easier business transactions, instant information and content sharing, and the introduction of new products and services. However, as economic agents increasingly depend on them, concerns are growing about the excessive concentration of economic power in a limited number of platforms. As a result, in the past few years, competition policy related to digital platforms has gained more attention, prompting vigorous discussions for improvement.

Globally, competition authorities have conducted numerous investigations, and there have been several lawsuits regarding the abuse of market power by digital platforms, along with active merger reviews. In addition, major jurisdictions, including Germany, the EU, and the US, have taken legislative actions to bolster regulations over their market dominance outside the purview of current competition or antitrust law. This policy shift stems from recognizing the limitations of existing competition policies, as enforcing such laws against the anti-competitive behaviors of digital platforms becomes increasingly challenging, and there is criticism about the asynchronicity in ex-post regulatory approaches.

Against this backdrop, this report puts forth directions for competition policy reform to effectively address anti-competitive behavior by digital platform firms. The focus is on the abuse of market power and mergers that contributed to acquiring and strengthening their dominance. This report consists of four chapters as follows. The first two chapters deal with the unilateral conduct of digital platforms. Chapter 1 analyzes self-preferencing practices resulting from their dual roles, drawing out appropriate regulatory improvement measures based on their categorization, a review of their economic effects, and empirical analysis results. Chapter 2 examines the issue of platform fees, which has become a significant social concern. While exploring desirable approaches, this chapter assesses whether this issue can be viewed from the perspective of price abuse whenhigh platform fees areproblematic by reviewing price abuse cases.

The next two chapters include studies on platform mergers, focusing on vertical and conglomerate mergers, which are receiving increasing attention as they are actively used to form platform ecosystems and diversify businesses. Chapter 3 analyzes how to consider the potential for self-preferencing by platforms in the merger review process. Self-preferencing is possible only when a platform has a dual role, securing its own or affiliated firms that compete with its business users, and non-horizontal mergers are a primary means of acquiring this dual position. Based on literature reviews and theoretical analysis, this chapter identifies considerations for non-horizontal merger reviews related to self-preferencing. Lastly, Chapter 4 investigates the formation and reinforcement of entry barriers due to platform mergers. Through theoretical analysis and reviews of past cases, this chapter provides recommendations for effectively evaluating entry barrier issues in merger reviews.

The collective conclusions can be summarized in two points. Firstly, competition policy reform should fully reflect the unique characteristics of digital platforms. The analysis of their typical unilateral conduct and mergers indicates that their economic effects and pathways are not fundamentally different from those of traditional companies. However, the distinct features of digital platforms can lead to new or multiple forms of anti-competitive behavior, make certain actions more pronounced or severe, and heighten the complexity and technical challenges in analyzing and judging their anti-competitive effects.

Secondly, caution is needed when introducing or strengthening antitrust regulations that extend beyond existing legal frameworks. This report emphasizes the importance of better market monitoring and industry-led discussions on active regulatory intervention on platform fees. For self-preferencing and platform mergers, it highlights the value of case-by-case reviews with assessment criteria for effectiveness. Without sufficient consideration for the dynamism of the digital market, where rapid technological change and innovation lead to emerging business models and blurred market boundaries, regulations mayend up hindering innovation incentives, ultimately hurting competition in the long run. Digital platform competition policy should achieve a delicate balance between reducing the harms of monopolies and protecting the incentives for innovation and healthy competition. At present, a flexible response approach to competition law is deemed necessary, tailored to the specific context of each case, while enhancing enforcement through improved timeliness and effectiveness.

Preface
Executive Summary

Chapter 1: An Economic Analysis of Platform Dual Roles and Self-preferencing Practices
　Section 1 Introduction
　Section 2 Concept of Dual Roles of Platforms and Self-preferencing
　Section 3 Characteristics and Economic Effects of Different Types of Self-preferencing
　Section 4 Empirical Analysis of Self-Preferencing
　Section 5 Policy Implications
　References
　Appendix

Chapter 2 An Economic Analysis of Platform Fee Abuse Cases: Focusing on Platform Fees
　Section 1 Introduction/Platforms and Fees
　Section 2 Major Fee Controversies and Litigation
　Section 3 Platform Fee Schemes
　Section 4 Platforms and Price Abuse
　Section 5 Secondary Effects of Differentiated Fees
　Section 6 Conclusion and Policy Implications
　References
　Appendix

Chapter 3 The Potential for Self-preferencing and the Review of Platform Mergers
　Section 1 Introduction
　Section 2 Scope of Analysis and Key Concepts
　Section 3 Self-preferencing and Theory of Anticompetitive Effects of Non-Horizontal Mergers
　Section 4 Theory Analysis
　Section 5 Conclusion
　References

Chapter 4 Examining Platform Mergers: Effects of Increased Entry Barriers
　Section 1 Characteristics of Platform Business Strategies and Platform Mergers
　Section 2 Economic Discussion on the Creation of Entry Barriers in Platform Mergers
　Section 3 Trial Decision Cases on Entry Barriers
　Section 4 Policy Recommendations
　Section 5 Conclusion
　References
　Appendix

ABSTRACT