This chapter discusses the economic effects of regulatory competition on two levels. First, external regulatory competition refers to the phenomenon that in the digital age markets are usually geographically broader than jurisdictions so that companies—in one and the same market—face regulation from several jurisdictions. Consequently, these regulations stand in an institutional competition with each other. Second, internal regulatory competition deals with the role of market-internal regulators. While this phenomenon is absent from the ordinary textbook market, companies that offer the service of organizing a digital marketplace or a communication network act as a market-internal regulator, setting, implementing, and enforcing the “rules of the game” within their ecosystem. The services of market-internal regulators can be beneficial; however, if these companies act in a dual role of being the regulator and, at the same time, competing with the players within their internal institutional framework, then significant problems are likely to arise.