On 2 June 2020 the European Commission launched two consultations: one to seek views on the Digital Services Act package, and the other on the options for introducing a new competition tool to address structural competition issues in markets.
The Commission has launched consultations aimed to address its concerns relating to certain digital, and digitally enabled, markets. These consultations include proposals for a range of powerful new interventions into digital markets, including regulation of certain ‘gatekeepers’ and the ability to review and impose remedies in a variety of markets.
The Commission’s documents include, among others, the following inception impact assessments:
i. In relation to the Digital Services Act package – one exploring policy options to amend the regulatory framework in cases where online ecosystems are controlled by large platforms, which may act as gatekeepers between businesses and consumers. Policies may include imposing up-front rules and obligations on how those platforms may behave.
ii. In relation to competition – one considering options for a new competition enforcement tool designed to address certain competition issues that cannot be tackled by the current EU competition laws. This tool would allow the Commission to investigate and impose remedies in markets which are not currently working well, similar to the UK’s market investigation tool.
The Digital Services Act package work is being undertaking by the European Commission under two pillars: one that seeks to put in place clear rules to protect users of digital services; and the other, to ensure platforms behave fairly and face competition.
While the Digital Services Act package is purely focused on digital markets and large online platforms, the option for a new competition tool to address structural issues could have implications beyond online markets. The rationale is that there is substantial overlap between digital and non-digital markets with the digitalisation of the economy. If the broadest option that has been put forward by the Commission is taken forward, this would allow the Commission to review and intervene in markets beyond large online platforms.
The consultation periods on these new initiatives are now open. Through the consultation period, the Commission will be interested to hear from smaller players, who have difficultly entering or remaining in markets, along with existing stakeholders, such as the large digital platforms. The consultation process offers any company that wishes to influence the ongoing debate a timely opportunity to get its views across.
New competition tool
Background to proposed competition power reforms. Current EU competition laws can address anti-competitive agreements, concerted practices and abuses of a dominant position. However, the Commission has been concerned for some time that there are certain structural competition issues, including that of some online platforms acting as gatekeepers between businesses and consumers, that cannot be addressed using current competition rules (indeed, some EU Member States have enacted their own laws to tackle these issues). To address these structural issues, the European Commission is consulting on options for a new competition tool as well as platform-specific ex ante (i.e., before the event) regulation. This will specifically look at the perceived issue that a limited number of large online platforms represent the largest share of certain digital markets and can act as gatekeepers to these markets.