Which Governance Mechanisms for Open Tech Platforms?

Digital markets remain characterised by the dominance of a handful of multinational firms. In contrast to counterparts in the US and elsewhere, European policy makers have sought to intensify competition in the sector through ex-ante regulation that imposes positive conduct obligations on dominant companies. The Digital Markets Act (DMA) requires large “gatekeeper” firms to facilitate contestability by enabling data portability, data access, and interoperability, among other features. In other words, the DMA seeks to “open up” large platforms by requiring them to provide data to, and work with, other tech firms’ services.

However, the implementation of these tools is both technically and legally complex, involving risks to privacy, security, and innovation. Policy makers have largely refrained from specifying how these features are to be implemented, leaving significant scope for access providers to take diverging approaches to compliance. CERRE’s new issue paper “Which governance mechanisms for open tech platforms?” examines how open governance mechanisms can help to ensure that contestability is achieved in a proportionate, effective, and consistent way.

Focusing on the data portability and vertical interoperability provisions of the DMA, the issue paper considers the most complex legal and technical implementation questions facing large platforms. Setting out and contextualising the core principles underlying ‘openness’ in standard setting, including transparency, inclusivity and fairness, author Zach Meyers explores the benefits and risks of open governance mechanisms in respect of these challenges. The paper’s key findings suggest that, while open governance mechanisms may exert restrictive pressure on innovation by access providers, they likely offer a better balance of opportunities and risks for both small and large firms when compared to unilateral governance on the part of the latter.

For more on the future of digital contestability in Europe, see our recent issue paper on AI Agents and Ecosystems Contestability.  CERRE’s ongoing research into the Digital Markets Act aligns with our goal to foster a thriving, vibrant, and competitive data and innovation economy, under the aegis of CERRE’s Ambitions for Europe 2024-2029.