Digital competition expert outlines four key priority areas for 2025-2026

Dr. Christophe Carugati, founder of Digital Competition advisory firm, announced on August 20, 2025, the release of his first Digital Competition Outlook report. The 12-page document identifies artificial intelligence, digital competition regimes, digital mergers, and competitiveness as the four priority areas that will shape policy developments across Europe and the United Kingdom over the coming year.

According to the report, the year 2025-2026 will prove pivotal across these four domains. The outlook provides insights designed to help government agencies, technology companies, and law firms prepare for complex regulatory challenges ahead.

"The year 2025-2026 will be pivotal in four priority areas: artificial Intelligence (AI), digital competition regimes, digital mergers, and competitiveness," states the report's introduction. Drawing on market and regulatory intelligence, the document serves as a strategic guide for navigating emerging policy frameworks and market developments.

Artificial intelligence transforms digital markets

Technological advances in artificial intelligence continue to reshape digital markets at unprecedented pace. Since the public launch of OpenAI's ChatGPT in November 2022, the technology sector has witnessed substantial innovation across multiple segments including AI agents, web browsers, search engines, and cloud computing.

AI agents represent algorithmic systems capable of autonomously performing tasks with minimal human oversight. These agents operate across online and offline environments and may ultimately disintermediate traditional digital platforms. According to the outlook, the technology already raises significant competition concerns including risks of input and distribution foreclosure by dominant platforms, potential exploitation by dominant AI agents themselves, and the possibility of tacit collusion among AI systems.

Web browsers serve as the primary gateway to the internet. While traditional browsers now integrate AI features, a new generation of browsers from companies like OpenAI and Perplexity is emerging. Developers, including Microsoft, are working toward an entirely new web architecture that would allow AI agents to interact seamlessly with websites and other agents. "These developments may transform the web browser market and could have far-reaching implications for the economics of the web," the document notes.

The development and deployment of AI models rely heavily on cloud infrastructure and services. Major cloud providers offer computational resources, such as Graphics Processing Units and data storage, alongside development platforms that enable AI companies to scale operations efficiently. While AI has not yet significantly impacted competition in cloud services, the UK's Competition and Markets Authority expects such impacts to materialize in the near future.

AI is redefining how users search for information online. Users increasingly seek direct answers rather than lists of search links. Established search engines like Google and Microsoft are incorporating AI functionalities to deliver more accurate answers. Simultaneously, AI developers such as OpenAI and Anthropic are incorporating real-time search capabilities into their systems to ensure up-to-date responses. These shifts have triggered competition concerns, particularly among content publishers who fear declining web traffic if users no longer click through to original sources. Regulatory interventions have been initiated in jurisdictions including the United Kingdom and South Africa.

Digital competition regimes ensure consistent opportunities

Jurisdictions globally have proposed or adopted digital competition regimes imposing obligations on large online platforms to regulate their business practices. These frameworks aim to open new opportunities for businesses and end-users to develop and access innovative services and products. While jurisdictions are at different implementation stages, ranging from development to enforcement, they share the common goal of promoting competition in digital markets.

Since 2023, the European Commission has implemented the Digital Markets Act against seven designated firms providing Core Platform Services. Enforcement has involved regulatory dialogue, specification decisions, and investigations into non-compliance. As part of the DMA's first formal review, the Commission launched a public consultation open until September 24, 2025, to gather stakeholder feedback on key aspects including the current list of Core Platform Services, the scope and effectiveness of obligations, enforcement practices, procedural rules, and the DMA's broader impact on businesses and end users. "This review could lead to legislative changes aimed at improving and future-proofing the DMA, particularly in light of emerging developments, such as AI," according to the report.

Since 2025, the Competition and Markets Authority has been empowered to enforce the Digital Markets, Competition and Consumers Act. It has initiated three designation investigations targeting Apple and Google, and published roadmaps outlining potential regulatory interventions. These roadmaps aim to provide clarity around possible conduct requirements and pro-competitive measures while inviting stakeholder input on proposed designation decisions and roadmaps. "This process enables stakeholders to actively shape the future direction of the regime," the document states.

The DMA applies alongside both EU and national competition laws. To ensure consistent enforcement and avoid regulatory fragmentation, Member States must cooperate through mechanisms defined in the DMA. National competition authorities have already opened investigations that intersect with DMA obligations. These overlapping cases will provide important guidance on how the Commission and Member States manage regulatory interplay. "The ongoing DMA review provides a timely opportunity for stakeholders to offer suggestions for enhancing coherence and legal certainty across jurisdictions and regulatory regimes," the outlook notes.

Globally, authorities monitor each other's approaches closely to ensure coherence. The UK's Competition and Markets Authority has explicitly noted in its roadmaps that some potential interventions will consider international developments, and that it will intervene when best placed to do so. In Australia, the government has positioned itself as a "fast-follower" by proposing mechanisms for mutual recognition of compliance. "These developments raise important questions about how competition authorities can maintain coherence while respecting jurisdictional differences," according to the analysis.

Digital mergers adapt policies for digital age

Competition authorities have been closely monitoring mergers in the digital sector. Drawing on lessons from past cases, they are adapting their merger control frameworks to remain fit for purpose in the digital age, particularly considering the rapid development of artificial intelligence.

In May 2025, the European Commission launched a public consultation, open until September 3, 2025, to update its merger guidelines. A key focus is digitalization, with the Commission intending to integrate its analytical framework for digital mergers. This includes considerations of data, privacy, interoperability, and ecosystems. "The consultation offers stakeholders the opportunity to suggest improvements that enhance the framework and align it with other relevant instruments, such as the DMA," the report states.

Digital mergers often fall outside existing notification thresholds, limiting authorities' ability to review them. Several jurisdictions have revised their rules in response. The French Competition Authority is considering a call-in power to review deals falling below national thresholds. At the EU level, following the Illumina judgment, the Commission is considering new policy options, as it can only accept referrals from Member States where transactions fall under their thresholds. The DMA review may also assess how the obligation to report all intended digital acquisitions interacts with the European Merger Regulation. "These reforms will shape the scope of future merger scrutiny, providing stakeholders with the opportunity to weigh in on the development of appropriate mechanisms," according to the document.

AI developers often partner with cloud providers, telecom operators, hardware manufacturers, and publishers to develop and deploy models. "These partnerships are under increasing scrutiny from competition authorities via merger and antitrust investigations," the outlook notes. Although no anticompetitive concerns have been identified, such arrangements are expected to influence merger control debates, as they often fall below relevant thresholds. Authorities may also evaluate them through a strategic lens, particularly regarding access to essential inputs such as energy. The French Competition Authority has announced plans to study energy access issues in the AI sector as some AI developers abroad have begun partnering with energy providers to secure supply.

Technology companies are increasingly acquiring AI firms primarily to gain access to talent, sometimes coupled with non-exclusive licenses to use their technologies. While some deals have been reviewed under merger rules, competition authorities have not found them problematic so far. However, the trend raises concerns, particularly if such transactions eliminate potential rivals or raise barriers for AI firms trying to attract skilled developers. "As these acquisitions grow in scale and number, they are likely to face increased scrutiny from regulators," the report warns.

Competitiveness strengthens European digital economy

Europe aims to strengthen its European digital economy through completing the Digital Single Market, removing barriers to harnessing data and digital technologies, and accelerating AI adoption. The Draghi Report on the Future of European Competitiveness and the Letta Report on the Single Market both underline that Europe continues to lag behind in the digital economy, a gap partly attributable to the incomplete Digital Single Market.

A decade after the Digital Single Market strategy was launched, its completion remains unfinished. The EU has made progress through harmonizing regulations covering data protection, consumer rights, competition, online safety, cybersecurity, and artificial intelligence, yet implementation and enforcement have often been uneven across Member States and regulatory regimes. This inconsistency has fueled market fragmentation and increased compliance burdens for European companies. As a result, firms are unable to fully leverage the scale benefits of a truly unified EU market. "As the Commission prepares the Digital Omnibus simplification package, expected in late 2025, stakeholders will have a crucial opportunity to present evidence-based proposals to close the gaps and strengthen regulatory consistency," the document states.

The EU already has a regulatory framework in place to improve data access and sharing, including the Data Act, the Data Governance Act, and the Digital Market Act. However, legal barriers remain. AI developers face legal uncertainty over the use of personal and copyrighted data for model training. This uncertainty slows innovation and weakens Europe's competitive edge in AI. "As the EU continues to propose regulations, such as on copyright and data access rules, the debate will intensify on how to ensure the regulatory environment is both pro-competitive and pro-innovative, enabling firms to fully harness the potential of data and digital technologies," according to the analysis.

AI has the potential to be a major driver of European economic growth, but only if adoption accelerates. In 2025, only 18% of European firms reported using AI, far short of the 2030 target of 75%. While the EU has proposed several initiatives, such as the AI Continent Action Plan, the challenge now is to translate them into concrete policy frameworks and ensure their effective implementation. "Bridging the adoption gap will be critical to realising the economic promise of AI and ensuring Europe's competitiveness on the global stage," the outlook concludes.

Industry context and implications

The timing of this outlook proves particularly relevant for the marketing community. Recent developments in artificial intelligence and digital advertising have created significant implications for how brands approach digital marketing strategies. Major platforms are increasingly integrating AI-powered features that could reshape traditional advertising models.

The report's emphasis on digital competition regimes aligns with ongoing regulatory pressures facing major technology platforms. Google continues to face challenges from European regulators regarding Digital Markets Act compliance, while competition authorities worldwide scrutinize the company's advertising technology practices. These regulatory developments directly impact digital marketing professionals who rely on these platforms for campaign execution.

For marketing professionals, the identified trends present both opportunities and challenges. The democratization of AI tools enables smaller organizations to compete more effectively, while regulatory changes may create new compliance requirements and operational complexities. The evolution of web browsers and search engines suggests fundamental shifts in how consumers discover and interact with digital content.

The report's focus on merger activity in the digital sector reflects ongoing consolidation trends that could reshape the competitive landscape. Recent antitrust victories against Google demonstrate regulators' willingness to challenge established market positions, potentially creating opportunities for alternative platforms and service providers.

Timeline

• November 2022: OpenAI launches ChatGPT publicly, triggering AI innovation wave across digital markets
• 2023: European Commission begins implementing Digital Markets Act against seven designated firms
• May 2025: European Commission launches public consultation to update EU Merger Guidelines, open until September 3, 2025
• 2025: UK Competition and Markets Authority gains powers to enforce Digital Markets, Competition and Consumers Act
• July 2025: European Commission launches public consultation on first DMA review, open until September 24, 2025
• August 2025: Dr. Christophe Carugati releases Digital Competition Outlook 2025/2026
• Late 2025: European Commission expected to release Digital Omnibus simplification package
• 2026: Target year for widespread generative AI adoption in video advertising according to industry reports

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PPC Land explains

Digital Markets Act (DMA): The European Union's flagship legislation targeting large online platforms designated as "gatekeepers" due to their market influence and size. The DMA imposes specific obligations on these platforms to prevent unfair practices and ensure fair competition in digital markets. Since 2023, the European Commission has enforced the DMA against seven designated firms, with ongoing regulatory dialogue, specification decisions, and non-compliance investigations. The regulation's first formal review launched in July 2025 to assess effectiveness and potential improvements.

Artificial Intelligence (AI): Advanced computational systems capable of performing tasks that typically require human intelligence, including machine learning, automated decision-making, and content generation. In digital markets, AI encompasses applications from search result optimization to advertising campaign management. The technology has fundamentally reshaped competition dynamics since ChatGPT's November 2022 launch, creating new market opportunities while raising concerns about market concentration and competitive foreclosure.

Competition Authorities: Regulatory bodies responsible for enforcing antitrust and competition laws to prevent monopolistic practices and promote fair market competition. Key authorities mentioned include the European Commission, the UK's Competition and Markets Authority, and various national competition authorities. These organizations investigate mergers, monitor market conduct, and impose remedies to address anticompetitive behavior, particularly in rapidly evolving digital markets.

Digital Competition Regimes: Specialized regulatory frameworks designed specifically to address competition issues in digital markets, distinct from traditional antitrust law. These regimes typically impose ex-ante obligations on large digital platforms before harm occurs, rather than relying solely on ex-post enforcement. Examples include the EU's Digital Markets Act and the UK's Digital Markets, Competition and Consumers Act, with similar frameworks under development globally.

Merger Guidelines: Comprehensive frameworks that competition authorities use to evaluate proposed business combinations and acquisitions. The European Commission's ongoing review of its merger guidelines focuses specifically on adapting analytical approaches for digital markets, considering factors like data concentration, privacy implications, interoperability requirements, and ecosystem effects. These guidelines help determine whether mergers may substantially reduce competition.

Core Platform Services (CPSs): Specific digital services identified under the Digital Markets Act that serve as gateways between business users and consumers. These include search engines, social networking services, video-sharing platforms, messaging services, operating systems, web browsers, virtual assistants, and cloud computing services. Platforms providing these services above certain thresholds face designation as gatekeepers with corresponding regulatory obligations.

Stakeholders: The various parties affected by digital competition policies, including government agencies, technology companies, law firms, publishers, advertisers, and end consumers. According to the outlook, effective policy development requires active stakeholder engagement through consultations, feedback processes, and collaborative input on regulatory frameworks. The document emphasizes stakeholders' role in shaping future digital competition policy directions.

Cloud Computing: The delivery of computing services including servers, storage, databases, networking, software, and analytics over the internet. In AI development, cloud infrastructure provides essential computational resources like Graphics Processing Units and development platforms that enable companies to scale operations efficiently. Major providers include Amazon Web Services, Microsoft Azure, and Google Cloud, with concentration concerns arising as AI demand increases.

Self-preferencing: Anticompetitive practices where dominant platforms favor their own products or services over those of competitors in search results, recommendations, or marketplace rankings. This behavior is specifically prohibited under digital competition regimes like the DMA. Competition authorities have identified self-preferencing as a key concern in digital markets, particularly affecting how consumers discover and access alternative services and products.

European Commission: The executive branch of the European Union responsible for proposing legislation, implementing decisions, and enforcing EU law. In digital competition matters, the Commission serves as the sole enforcer of the Digital Markets Act, conducts merger reviews, and investigates potential violations of competition law. The Commission's role includes launching consultations, imposing penalties, and coordinating with national authorities to ensure consistent enforcement across member states.

Summary

Who: Dr. Christophe Carugati, founder of Digital Competition advisory firm and former affiliate fellow at economic think-tank Bruegel, released the comprehensive outlook targeting government agencies, technology companies, and law firms.

What: A 12-page Digital Competition Outlook report identifying four priority areas that will shape digital and competition policy developments: artificial intelligence, digital competition regimes, digital mergers, and competitiveness.

When: The report was announced on August 20, 2025, covering expected developments for the 2025-2026 period, with multiple regulatory milestones scheduled throughout late 2025 and into 2026.

Where: The analysis focuses primarily on Europe and the United Kingdom, while also examining global trends and regulatory developments across jurisdictions including Australia and the United States.

Why: The outlook aims to help stakeholders prepare for and navigate complex regulatory challenges and market developments in an increasingly digitized economy where artificial intelligence, competition policy, and merger activity are reshaping traditional business models and market structures.