Europe’s Online Shopping Boom Raises Fears of Platform Market Concentration

An OECD study warns that online marketplaces in Poland, Latvia and Lithuania are becoming increasingly dominated by major platforms like Allegro and Pigu, creating risks of reduced competition and growing dependence among sellers. While digital marketplaces have boosted convenience and e-commerce growth, regulators are being urged to strengthen oversight to prevent excessive market concentration and unfair platform practices.

A major new study by the Organisation for Economic Co-operation and Development (OECD), prepared with support from the European Union and competition authorities in Poland, Latvia and Lithuania, warns that the rapid rise of online shopping is creating markets increasingly dominated by a handful of powerful digital platforms.

The report examines how online marketplaces have transformed retail across the three countries while also raising serious concerns about competition, market power and the growing dependence of businesses on dominant platforms. Researchers found that online shopping has become a normal part of daily life, especially after the COVID-19 pandemic accelerated digital buying habits across Europe.

Today, online marketplaces are no longer just websites for shopping. They have become major digital ecosystems connecting sellers, consumers, payment systems, delivery networks and advertising services.

Allegro and Pigu Dominate Regional Markets

The study identifies Poland's Allegro and the Baltic platform Pigu as the strongest players in their respective markets. In Poland, Allegro holds an especially powerful position on both the consumer and seller sides of the market. The OECD believes its dominance is so strong that meaningful competition may remain limited for years.

In Latvia and Lithuania, Pigu is the leading marketplace, particularly for sellers looking to reach local consumers. Although international platforms like Temu and AliExpress have become more popular with shoppers because of low prices and aggressive marketing, the report says they still do not pose a major challenge to local incumbents when it comes to attracting sellers.

The report explains that online marketplaces naturally become stronger as more users join them. More sellers attract more buyers, and more buyers attract more sellers. These "network effects" make it very difficult for smaller rivals to compete once a platform becomes dominant.

Sellers Increasingly Depend on Big Platforms

One of the strongest warnings in the report concerns the growing imbalance between marketplaces and the businesses that use them. Many sellers now rely heavily on large platforms as their main route to customers, giving marketplaces enormous bargaining power.

According to the OECD, platforms can raise commissions, change search rankings, alter rules or push sellers to use additional services such as delivery and payment systems. Sellers interviewed during the study expressed concerns about sudden policy changes, lack of transparency and growing dependency on a few dominant companies.

The report also highlights concerns about hybrid business models, where marketplaces host independent sellers while also competing against them by selling their own products. This creates fears that platforms may favour their own goods using control over search algorithms, advertising and consumer data.

Digital Ecosystems Are Expanding Beyond Shopping

The study shows that online marketplaces are expanding far beyond simple retail platforms. Companies such as Allegro and Pigu are investing heavily in logistics, parcel delivery, payment systems and advertising networks.

This expansion strengthens their control over the digital economy because competitors now need much more than a shopping platform to challenge them. They also need delivery systems, data infrastructure and advertising tools that consumers and sellers increasingly expect.

The OECD warns that these integrated ecosystems create higher barriers for new businesses trying to enter the market. Large platforms also collect huge amounts of data, allowing them to improve recommendations, personalise shopping experiences and target advertisements more effectively than smaller rivals.

Regulators Push for Stronger Oversight

The report arrives as Europe introduces stricter digital regulations through laws such as the Digital Markets Act and the Digital Services Act. These rules are designed to limit anti-competitive behaviour by large platforms and improve transparency in digital markets.

The OECD argues that traditional competition laws are often too slow to deal with fast-moving digital industries. Regulators, therefore, need stronger powers to monitor platform behaviour before markets become completely dominated by a few companies.

To improve competition, the report recommends stronger enforcement by national competition authorities, better market monitoring and measures that make it easier for sellers to switch between platforms. It also calls for closer scrutiny of how marketplaces use data, rank products and expand into related industries.

Ultimately, the study concludes that online marketplaces have brought enormous benefits to consumers through convenience, choice and innovation. However, without effective oversight, the same forces driving digital growth could also reduce competition and increase the concentration of economic power in Europe's online economy.