Artificial Intelligence and Competitive Dynamics in Downstream Markets

Artificial Intelligence (AI) is transforming competition across a wide range of sectors. As a general-purpose technology, its influence extends well beyond the market for AI systems themselves. AI enables new forms of production, reshapes service delivery, redefines firm capabilities, and may also change the market dynamics across a range of sectors and markets. These changes are likely to have far-reaching implications for how competition unfolds in both digital and traditional industries.

In December 2025, the OECD Global Forum on Competition explored the mechanisms through which AI may influence competitive dynamics in downstream markets, such as markets whose primary output is not related to AI, but where AI is used as an input. The discussion considered the ways in which the use of AI systems may support competition by substituting for labour, increasing efficiency and lowering barriers to entry, as well as the emerging risks related to data access, model restrictiveness and the downsides of AI use. The session also looked at what this means for competition law enforcement, market monitoring and policy adaptation. The purpose of the discussion was not to focus on the AI market itself, nor competition within the value chain for AI development, but solely on the application of AI to other markets.

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The discussion highlighted AI as a powerful but unevenly diffused general-purpose technology. Adoption by firms was described as costly, complex and risky, contributing to a widening AI divide between large firms and SMEs. While AI can disrupt markets by enabling entry, efficiency gains and new business models, it may also reinforce incumbency through foreclosure, vertical integration and ecosystem strategies rather than solely through data advantages. Participants noted that competition risks remain largely classical, including algorithmic collusion, self-preferencing, exclusionary conduct or price discrimination; however, these are increasingly difficult to detect and remedy due to opacity, speed and scale, including the “black-box” nature of AI systems. Understanding who controls data, models and computing resources emerged as central to effective enforcement. Several contributions stressed that existing tools may be too slow or too resource-intensive, prompting calls for closer regulatory dialogue, compliance frameworks that preserve innovation, enhanced technical capacity in authorities, and consumer protection safeguards, alongside public support measures aimed at widening access to data, compute and infrastructure.

The OECD Global Forum on Competition brings together each year high-level officials from more than 100+ competition authorities worldwide. In 2025 the Forum explored AI in downstream markets, the healthcare sector, competition in informal markets and peer reviewed Kenya's competition regime.

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