Competition rules and DSA
The digital revolution demands new mechanisms to regulate competition in the digital sector and large online platforms in particular. Competition authorities in Europe – and worldwide – share concerns that the existing competition rules are insufficient to tackle the complex legal issues stemming from the development of digital markets. The COVID-19 pandemic is an additional factor that requires fine-tuning of competition regulation. The quick spread of the disease has resulted in smaller businesses becoming increasingly reliant on large online platforms to preserve trading levels and a visible presence in online markets. In order to cope with these problems, many competition authorities have conducted their own investigations focused on the competition rules that should be applied to the digital sector.
At the EU level, the Platform to Business Regulation has been enacted in an effort to establish a fair and transparent commercial relationship between business users and online platforms. Regulation (EU) 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services provides that “a targeted set of mandatory rules should be established at Union level to ensure a fair, predictable, sustainable and trusted online business environment within the internal market. In particular, business users of online intermediation services should be afforded appropriate transparency, as well as effective redress possibilities, throughout the Union in order to facilitate cross-border business within the Union and thereby improve the proper functioning of the internal market and to address possible emerging fragmentation in the specific areas covered by this Regulation”.
In addition, an EU Observatory on the Online Platform Economy has been set up to monitor and analyse the online platform economy. The Observatory has a dedicated website where professional platform users can flag issues they experience with platforms. The observatory uses this information in its work to raise the Commission’s awareness in order to adopt informed and targeted policies as a basis for good practices.
The European Commission has also put forward various wider scope proposals to modernise the regulatory framework in the digital sector at EU level, including the Digital Services Act package, which involves “ex ante regulation”. This type of regulation aims at conferring increased powers on national competition authorities to examine structural problems in markets.
Some national competition authorities have set up special taskforces to consider and take forward initiatives to address some of the issues posed by technological development such as the Task Force for Internet Platforms in Germany and the Digital Markets Taskforce in the UK, to name a few. In the UK, the Competition and Markets Authority, supported by Ofcom and the ICO, aim at the establishment of a Digital Markets Unit and to enact a code of conduct to regulate platforms with strategic market status (SMS Firms). France and Germany have initiated legislative changes at the national level but following different approaches.
The most fruitful perspective in this complex area is to follow a harmonised path since there is a danger that market participants who operate on a global scale could face multifarious and contradictory obligations in different jurisdictions. In a joint memorandum on digital platforms and the possible changes to competition law at the European level, the Nordic competition authorities have expressed their view that “a harmonised approach to any regulatory efforts to avoid fragmentation and safeguard the effective functioning of digital markets” is mostly needed. Similar calls for harmonisation are also raised by the German competition authority (BkA).
Apparently, governments and competition bodies recognise the need for further regulation of digital services and platforms. Therefore it will be important to clarify how the DSA package will interact with the current competition framework under Articles 101 and 102 TFEU, i.e. what “tool” should be used by competition authorities and in which circumstances. Experts claim there will be significant developments over the next years in the field of digital regulation in the UK and EU. The ideal case is regulatory solutions operate in perfect to partial harmony with each other. However, whether such harmony is achievable in practice remains to be seen.
Compiled by Media 21 Foundation from: