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The Digital Markets Act: Making economic regulation of platforms fit for the digital age
Publications
#Tech, Media, Telecom

Digital Markets Act: Making economic regulation of platforms fit for the digital age

  • November 24, 2020
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Document(s)
REPORT | Digital Markets Act: Making economic regulation of platforms fit for the digital age
RECOMMENDATIONS | Digital Markets Act: Making economic regulation of platforms fit for the digital age
SLIDES | Digital Markets Act: Making economic regulation of platforms fit for the digital age (Prof. Alexandre de Streel and Richard Feasey)

Following the European Commission’s proposal for the Digital Markets Act (DMA) to foster a fair and competitive online economy, CERRE presents its report “Digital Markets Act: Making economic regulation of platforms fit for the digital age“.

This research report, which has been referenced in the Commission’s DMA Impact Assessment Report, is comprised of the preparatory Issue Papers, the non-attributable summaries of the workshop discussions held during the second half of 2020 with different stakeholders, and the resulting CERRE recommendations for the DMA, which were released separately in November 2020.

The report, which is part of a CERRE TMT project on the DSA and DMA, addresses the i) scope, ii) criteria, iii) obligations and iv) enforcement of the DMA, recommending that the DMA focuses on the following objectives:

  1. Promote competition, market contestability and innovation by complementing (not substituting) competition law when it’s either ineffective or unable to intervene.
  2. Empower users by providing them with the relevant information, tools and incentives to make informed choices.
  3. Ensure fairness in B2B relationships by protecting business users and partners against unfair practices.
  4. Promote the Digital Single Market, ensuring that it is not fragmented by a growing volume of national rules that regulate large gatekeeper platforms (LGPs) differently.

The authors recommend that the scope of the DMA covers all online platforms to be sufficiently flexible and future proof. This CERRE report provides a systematic and precise definition of large gatekeeper platforms (LGPs) upon which specific prohibitions and obligations should be imposed. To be categorised as gatekeepers, platforms should:

  1. Be large: based upon the number of unique users, time on site, or proportion of interactions;
  2. Hold a gatekeeper position on which users depend because the platform controls a high proportion of users with low ability or incentive to multi-home across different platforms, or switch between platforms;
  3. Enjoy enduring market power because of high entry barriers to  existing services due to network effects and the control of capabilities necessary for innovation within the digital economy, such as data;
  4. Orchestrate an ecosystem of products and services thanks to conglomerate presence across markets.

To ensure access to the digital market for SMEs, CERRE recommends that the DMA prohibits LGPs from imposing commercial terms and practices that limit competition and fairness, such as:

  • Disempowering consumers and businesses from multi-homing or switching.
  • Anticompetitive behaviour and unfair leverage of gatekeeper power.

CERRE also recommends that platforms beyond just LGPs are subject to interoperability or data sharing obligations on a case-by-case basis, and only when necessary and proportionate as they risk disincentivising investment and innovation.

Assessing competitiveness in digital markets often requires a difficult balancing of pro and anti-competitive effects and assessing the economic effects of digital firms’ conduct involves several trade-offs between different values, rights and interests. Therefore, CERRE recommends new ways of enforcement that are more participatory, experimental, data-based and technological.

The report calls on European policy makers to not only consider what the rules should be but also how they will be enforced. CERRE’s recommendations paper has been referenced by the European Parliamentary Research Service (EPRS) in its briefing “Regulating digital gatekeepers: Background on the future digital markets act“.

The DSA and DMA package has been discussed in series of ‘rendez-vous’ events hosted by CERRE. These events delved into specific aspects of each proposal with key players from the online platforms and telecommunications industries, national regulators, policy makers, international stakeholders and academics. This paper was presented during the first of these ‘rendez-vous’, which took place on 19 January 2021.

Read our report on the Digital Services Act (DSA).

Author(s)
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Alexandre De Streel (2)
Alexandre de Streel
Academic Director
and University of Namur

Alexandre de Streel is the Academic Director of the digital research programme at the Brussels think-tank Centre on Regulation in Europe (CERRE), professor of European law at the University of Namur and visiting professor at the College of Europe (Bruges) and SciencesPo Paris. He sits in the scientific committees of the Knight-Georgetown Institute (US), the European University Institute-Centre for a Digital Society (Italy) and the Mannheim Centre for Competition and Innovation (Germany).

His main research areas are regulation and competition policy in the digital economy (telecommunications, platforms and data) as well as the legal issues raised by the developments of artificial intelligence. He regularly advises the European Union and international organisations on digital regulation.

Previously, Alexandre held visiting positions at New York University Law School, the European University Institute in Florence, Panthéon-Assas (Singapore campus), Barcelona Graduate School of Economics and the University of Louvain. He also worked for the Belgian Deputy Prime Minister, the Belgian Permanent Representation to the European Union, and the European Commission. He has also been the chair of the expert group on the online platform economy, advising the European Commission.

Alexandre de Streel is the Academic Director of the digital research programme at the Brussels think-tank Centre on Regulation in Europe (CERRE), professor of European law at the University of Namur and visiting professor at the College of Europe (Bruges) and SciencesPo Paris. He sits in the scientific committees of the Knight-Georgetown Institute (US), the European University Institute-Centre for a Digital Society (Italy) and the Mannheim Centre for Competition and Innovation (Germany).

His main research areas are regulation and competition policy in the digital economy (telecommunications, platforms and data) as well as the legal issues raised by the developments of artificial intelligence. He regularly advises the European Union and international organisations on digital regulation.

Previously, Alexandre held visiting positions at New York University Law School, the European University Institute in Florence, Panthéon-Assas (Singapore campus), Barcelona Graduate School of Economics and the University of Louvain. He also worked for the Belgian Deputy Prime Minister, the Belgian Permanent Representation to the European Union, and the European Commission. He has also been the chair of the expert group on the online platform economy, advising the European Commission.

Martin Cave
Martin Cave
Visiting Professor
Imperial College London

Martin Cave is a Visiting Professor at the Imperial College London. He was an Academic Co-Director at CERRE.

He is a regulatory economist specialising in competition law and in the network industries, including airports, broadcasting, energy, posts, railways, telecommunications and water.

Professor Cave has published extensively in these fields, and has held professorial positions at Warwick Business School, University of Warwick, and the Department of Economics, Brunel University.

Martin Cave is a Visiting Professor at the Imperial College London. He was an Academic Co-Director at CERRE.

He is a regulatory economist specialising in competition law and in the network industries, including airports, broadcasting, energy, posts, railways, telecommunications and water.

Professor Cave has published extensively in these fields, and has held professorial positions at Warwick Business School, University of Warwick, and the Department of Economics, Brunel University.

Richard Feasey (1)
Richard Feasey
CERRE Senior Advisor
Tech, Media, Telecom

Richard Feasey is a CERRE Senior Adviser, an Inquiry Chair at the UK’s Competition and Markets Authority and Member of the National Infrastructure Commission for Wales.

He lectures at University College and Kings College London and the Judge Business School.

He has previously been an adviser to the UK Payments Systems Regulator, the House of Lords EU Sub-Committee and to various international legal and economic advisory firms.

He was Director of Public Policy for Vodafone plc between 2001 and 2013.

Richard Feasey is a CERRE Senior Adviser, an Inquiry Chair at the UK’s Competition and Markets Authority and Member of the National Infrastructure Commission for Wales.

He lectures at University College and Kings College London and the Judge Business School.

He has previously been an adviser to the UK Payments Systems Regulator, the House of Lords EU Sub-Committee and to various international legal and economic advisory firms.

He was Director of Public Policy for Vodafone plc between 2001 and 2013.

Jan Krämer (2)
Jan Krämer
Academic Co-Director
and University of Passau

Jan Krämer is an Academic Co-Director at CERRE and a Professor at the University of Passau, Germany, where he holds the chair of Internet & Telecommunications Business.

Previously, he headed a research group on telecommunications markets at the Karlsruhe Institute of Technology (KIT), where he also obtained a diploma degree in Business and Economics Engineering with a focus on computer science, telematics and operations research, and a Ph.D. in Economics, both with distinction.

He is editor and author of several interdisciplinary books on the regulation of telecommunications markets and has published numerous articles in the premier scholarly journals in Information Systems, Economics, Management and Marketing research on issues such as net neutrality, data and platform economy, and the design of electronic markets.

Professor Krämer has served as academic consultant for leading firms in the telecommunications and Internet industry, as well as for governmental institutions, such as the German Federal Ministry for Economic Affairs and the European Commission.

His current research focuses on the role of data for competition and innovation in online markets and the regulation of online platforms.

Jan Krämer is an Academic Co-Director at CERRE and a Professor at the University of Passau, Germany, where he holds the chair of Internet & Telecommunications Business.

Previously, he headed a research group on telecommunications markets at the Karlsruhe Institute of Technology (KIT), where he also obtained a diploma degree in Business and Economics Engineering with a focus on computer science, telematics and operations research, and a Ph.D. in Economics, both with distinction.

He is editor and author of several interdisciplinary books on the regulation of telecommunications markets and has published numerous articles in the premier scholarly journals in Information Systems, Economics, Management and Marketing research on issues such as net neutrality, data and platform economy, and the design of electronic markets.

Professor Krämer has served as academic consultant for leading firms in the telecommunications and Internet industry, as well as for governmental institutions, such as the German Federal Ministry for Economic Affairs and the European Commission.

His current research focuses on the role of data for competition and innovation in online markets and the regulation of online platforms.

Giorgio Monti
Giorgio Monti
Research Fellow
and Tilburg Law School

Giorgio Monti is a CERRE Research Fellow and Professor of Competition Law at Tilburg Law School.

He began his career in the UK (Leicester 1993-2001 and London School of Economics (2001-2010) before taking up the Chair in competition law at the European University Institute in Florence, Italy (2010-2019). While at the EUI he helped establish the Florence Competition Program which carries out research and training for judges and executives. He also served as Head of the Law Department at the EUI.

His principal field of research is competition law, a subject he enjoys tackling from an economic and a policy perspective.

Together with Damian Chalmers and Gareth Davies he is a co-author of European Union Law: Text and Materials (4th ed, Cambridge University Press, 2019), one of the major texts on the subject. He is one of the editors of the Common Market Law Review.

Giorgio Monti is a CERRE Research Fellow and Professor of Competition Law at Tilburg Law School.

He began his career in the UK (Leicester 1993-2001 and London School of Economics (2001-2010) before taking up the Chair in competition law at the European University Institute in Florence, Italy (2010-2019). While at the EUI he helped establish the Florence Competition Program which carries out research and training for judges and executives. He also served as Head of the Law Department at the EUI.

His principal field of research is competition law, a subject he enjoys tackling from an economic and a policy perspective.

Together with Damian Chalmers and Gareth Davies he is a co-author of European Union Law: Text and Materials (4th ed, Cambridge University Press, 2019), one of the major texts on the subject. He is one of the editors of the Common Market Law Review.

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