The Digital Markets Act: Moving from Competition Law to Regulation for Large Gatekeepers

Introduction:

The Digital Markets Act, presented as a European Commission proposal on 15 December 2020 and under debate with Parliament and the Council now, shall serve as nothing less than the fundamental framework for the digital world. It contains tough obligations for large digital gatekeepers and has some ideas on enforcement. Executive Vice-President Margrethe Vestager compared the Digital Markets Act (DMA) and the Digital Services Act (DSA) with the introduction of traffic lights for regulating traffic in Cleveland, Ohio, in 1914 – bringing order to a previously chaotic system.

When recounting this anecdote Vestager omitted the fact that the first attempts with traffic lights, undertaken in London in 1868, did not go too well: Three weeks after the installation, the gas lights exploded. The DMA proposal is probably a bit better prepared in that it can build on some national legislation and a large number of reports on the shortcomings of current rules that should “tame the tech-titans”. However, the deliberations need to answer several pressing questions.

• What are the principles that shall guide this piece of regulation (if it is regulation, and not competition law)?
• Which companies should be addressed as “gatekeepers”?
• What obligations should they have and how can it be ensured that obligations remain up to date?
• How are the obligations to be enforced, and what is the role for national laws and national agencies?

In this contribution, apart from setting out the proposal, we advocate, in particular, that the DMA needs a more principled approach and a better enforcement structure. So far, the practices of companies like Google, Amazon, Facebook and Apple (GAFA) were predominantly dealt with under Articles101, 102 TFEU. However, there is a widespread concern that competition law achieves too little too late. Instead of reforming competition rules on the basis of Article 103 TFEU, the Commission chose Article 114 TFEU as the legal basis. This opens the field for more far-reaching regulatory goals that go beyond an efficiency-oriented competition law standard. The Commission moves from competition law to “regulation”.

ESO Records

Proposal for a Regulation on contestable and fair markets in the digital sector (Digital Markets Act) https://www.europeansources.info/record/proposal-for-a-regulation-on-contestable-and-fair-markets-in-the-digital-sector-digital-markets-act/

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