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

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

  • 24 November 2020
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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 will be discussed in series of ‘rendez-vous’ hosted by CERRE. These events will delve into specific aspects of each proposal with key players from the online platforms and telecommunications industries, national regulators, policy makers, European startups, international stakeholders and academics. The first of these ‘rendez-vous’, which will deep-dive into the objectives and criteria for large gatekeeper platforms, took place on 19 January 2021.

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

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)
Author(s)
Alexandre De Streel
Alexandre de Streel
CERRE Academic Co-Director
Professor of EU Law, University of Namur

Alexandre de Streel is Academic Co-Director at CERRE and a professor of European law at the University of Namur and the Research Centre for Information, Law and Society (CRIDS/NADI). He is a Hauser Global Fellow at New York University (NYU) Law School and visiting professor at the European University Institute, SciencesPo Paris and Barcelona Graduate School of Economics, and also assessor at the Belgian Competition Authority.

His main areas of research are regulation and competition policy in the digital economy as well as the legal issues raised by the developments of artificial intelligence. Recently, he advised the European Commission and the European Parliament on the regulation of online platforms.

Previously, Alexandre worked for the Belgian Deputy Prime Minister, the Belgian Permanent Representation to the European Union and the European Commission (DG CONNECT). He holds a Ph.D. in Law from the European University Institute and a Master’s Degree in Economics from the University of Louvain.

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 and is now a member of the CERRE Board of Directors.

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
Richard Feasey
Senior Advisor
Tech, Media, Telecom

Richard Feasey is a Senior Advisor within the CERRE Tech, Media, Telecom academic team, an independent consultant and a Senior Adviser to the Payment Systems Regulator in the UK.

He lectures at University College London and Kings College London.

Richard was previously the Public Policy Director of Vodafone Group plc from 2001 until 2013.

In October 2017, he was appointed to the panel of the UK’s Competition and Markets Authority and in October 2018 to the National Infrastructure Commission for Wales.

Jan Krämer
Jan Krämer
CERRE Academic Co-Director
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.

Giorgio Monti
Giorgio Monti
Professor
Tilburg Law School

Giorgio Monti is 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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