Dominant positions or dominant designs? Market power and innovation in European competition law

Although market power in platform-mediated markets seems to be ubiquitous, in some cases it may be short-lived due to innovation. A new undertaking fuelled by innovation can take away the market power of established undertakings. The theory of the industry life cycle and the concept of dominant design might help to understand when market power is a problem and when innovation may make market power short-lived. All industries follow a similar pattern, where the emergence of a dominant design is the key turning point, signifying when innovation is no longer a competitive constraint. It is this more dynamic theory that the Court and the Commission could use to both nuance and inform the market power assessment and the role of innovation used in abuse of dominance and merger control cases. These theories will not replace the market power assessment but it could support the current assessments of market power.