Market power, and conduct that increases it, are of central concern in competition law, which aims at preventing consumer harm from firms abusing dominant positions. Market definition plays a crucial role in assessing market power, typically by identifying interchangeable goods and analyzing cross-price elasticity or consumer substitutability through small price changes.

Market definition is less useful in digital markets because of their unique characteristics. New technologies have transformed society, introducing business models driven by high innovativeness, platforms, utilization of data, and specific pricing strategies, such as providing zero-price services. These features confound market definition. Payments are not always made with monetary means in the digital economy. Platform mechanics can create markets that otherwise would not be sustainable, and platforms usually lead to tipping. Data can be a powerful, even insurmountable, leveraging tool for firms, by reinforcing platform effects. Furthermore, the build-on nature of goods and services can create lock-in effects through ecosystems.

The solution is to reconceptualize market definition in digital markets by ensuring that economic rigor is observed. This includes shifting the focus from price to quality parameters for assessing substitutability and placing greater emphasis on competitive constraints currently categorized as potential competition. Users' attention should also be utilized to scope interchangeability. Additionally, aftermarket-inspired tests should be applied to system markets, such as digital ecosystems, to better capture their dynamics. Based on investigations of how relevant markets for products and services in the digital economy should be defined, this dissertation presents two tests.

The Platform Test is a three-pronged approach used to define markets, determining which platforms compete against which other services. First, (1) it eliminates services that do not gather data. Second, (2) it uses an attention-based pre-test to scope usage shares of the relevant platform compared with other services, taking potential competitors into account. Lastly, (3) it applies a Small But Significant Non-Transitory Decrease in Quality test.

The Market Relations Test is used to define markets in cases where the products or services being investigated are part of an ecosystem. It determines whether products belong on the same market by looking at the extent to which a user is locked into an ecosystem. If the user is considered to be locked in, the market is defined more narrowly. If the user is not considered to be locked in, the ecosystem products or services compete in a wider relevant market. This is determined by asking four questions: whether (1) users can make an informed choice of lifecycle pricing when purchasing a product (at the primary market level), (2) users are likely to make an informed choice, (3) enough users in an apparent policy of exploitation would adapt their purchasing behavior (at the secondary market level), and (4) this adaptation would take place in a reasonable time frame. If the answer is “yes” to all, other products at the primary market level should be considered competitors. If the answer is “no” to any question, the market should be defined as the primary market product, as other products do not exert any competitive pressure.