Classroom Companion: Business

13.4 
 Conclusions
The two dominating market forms in digital economy are de facto monopolies and 
oligopolies. De facto monopolies emerge in markets with strong positive network 
effects as explained in 
7
Chap. 
9
. The monopoly builds huge barriers so that it is 
almost impossible for new entrants to compete with them. Standard economic 
theory is obviously not applicable to these monopolies in cases where the services 
are offered free of charge for the customers since, in such cases, supply-demand 
curves are meaningless.
Oligopolies are formed in markets where there is room for only few competi-
tors, for example, mobile network operations. In cases such as streaming services, 
there may be many competitors, but just a few of them are big enough to dominate 
the market. These markets may then also be regarded as oligopoly markets, though 
they may become markets with monopolistic competition if the suppliers are able 
to differentiate their products. In such markets, both big and small enterprises may 
live peacefully together.
Another feature that makes digital enterprises more complicated than standard 
industrial enterprises is that they often are multisided platforms serving two or 
more interacting markets. The digital enterprise may then be a monopoly in one 
market and an oligopoly in another. Services may be offered for free to one group 
of users, while other user groups pay for the product where the price depends on 
. Table 13.2 Mobile apps statistics. (Authors’ compilation)
Number of 
mobile apps 
(millions)
Mobile apps 
revenues 
(billion $)
Mobile apps 
downloads 
(billions)
Revenue per 
download 
($)
App Store
2.2
12.0
7.6
1.6
Google Play
2.8
6.2
19.5
0.32