Competition law and digital markets : Do we need a DG COMP 2.0 ?

In an earlier blog post, I discussed what could, or perhaps should, be the role of EU competition law in a post-DMA environment. That is an important question considering that if the DMA proposal is adopted, a range of issues that are traditionally addressed under EU competition rules will (also or instead) be addressed under the DMA.

What I did not discuss in that blog post, however, is whether DG COMP, i.e., the institution and the rules on the basis on which it operates, has to evolve to remain “relevant” as an enforcement body in digital markets. One of the rationales for ex ante regulation is indeed that competition law might not be the right vehicle to address the issues created by large platforms, for instance because competition investigations take considerable time, which is of course problematic in fast moving digital markets.

While the DMA will address this issue by containing obligations that will automatically apply to designated gatekeepers, there is still in theory an important role to play for DG COMP in a DMA world.

  • First, the DMA only focuses on “core platform service” providers that are designated as gatekeepers. Thus, while some of the activities of large platforms, such as Google or Apple, will likely fall within the scope of the DMA (e.g., Google Search and the Apple App Store), other activities carried out by the same platforms will not.
  • Second, many companies that are active in digital markets and in some cases hold a dominant position on a given market will not fall within the scope of the DMA, either because they do not provide one of the core platform services identified in the DMA proposal or because they do not meet the thresholds set at Article 3(2) (and are not designated via the procedure provided at Articles 3(6) and 15).
  • Third, even in the case where a platform is designated as a gatekeeper, some of its practices may still not fall under the obligations of Articles 5 and 6 (which cannot anticipate all possible problematic conducts), and thus when they are anticompetitive may need to be remedied via the applications of Articles 101-102 TFEU.

Yet, in these cases, there is no reason to believe that DG COMP will act faster than it currently does in its investigations of large tech platforms. Thus, the issue of speed will remain.

One of the reasons why abuse of dominance cases take a long time is because of the necessity in Article 102 TFEU cases to define markets, assess whether the investigated company is dominant on a defined market, construct one or several theories of harm, show the presence of anticompetitive effects and analyse whether there is an objective justification to the conduct. Unless there is a major evolution (or perhaps even a revolution) of the case-law on Article 102 TFEU, these constraints will not evaporate.

As to whether such an evolution/revolution is needed, reasonable people can have different opinions. On the one hand, there is no question that the effects-based analysis that was promoted by the Commission in its Guidance paper and largely adopted by the CJEU (see, for instance, its Intel judgment) was badly needed. On the other hand, it can be questioned whether the standard of proof has not become too high in areas where there is a large asymmetry of information (and resources) between the Commission and the investigated companies. That has led some observers to suggest a reversal of the burden of proof in some circumstances.

Now, the question is whether, despite the presence of these constraints, DG COMP could accelerate procedures. While Article 102 TFEU cases are complex, it could still be argued that some investigations have taken an excessive amount of time. There is no question DG COMP officials work hard and it is fair to say that in some cases defence lawyers may use various tactics to slow down their work. It can also be said that the (human) resources available to DG COMP may be insufficient to deal with the volume of work required by increasingly complex tech investigations.

Yet, like in every institution, there are instances where processes could be streamlined, and efficiency increased. Here are a few questions that can be legitimately asked from that standpoint. Should the various phases of antitrust investigations be subject to time limits? That is a complex question as there are pros and cons, and ways can always be found to circumvent time limits. Should DG COMP give greater visibility on the timeframe of its investigations (as is the case of the CMA)? That seems like a good idea. Is DG COMP drowning in analysing the responses of its own detailed RFIs? Perhaps. Are too many resources absorbed by merger control? Possibly when you see the current scale of the exercise. Does DG COMP necessarily have officials with the right set of skills to handle highly complex tech cases? The answer seems to be negative as DG COMP has not (at least officially) invested in building teams of data scientists (unlike the CMA and the French competition authority).

These are complex questions (which may require answers of different nature) that cannot be addressed in a blog post, but they are important if DG COMP wants to continue to play a central role in tech cases. That is not only because once the DMA has been adopted some of the issues that DG COMP would typically address will be dealt with under DMA rules and another enforcement body of the Commission, but also because national competition authorities have become increasingly aggressive enforcers in the tech space as illustrated by the cases pursued by the Bundeskartellamt (e.g., against Facebook), the French Competition Authority (e.g., against Google) and the Dutch ACM (e.g., against Apple). These authorities are well resourced and often present the advantage of speed.

This does not mean that there is a risk that DG COMP could become irrelevant as this will remain the go-to place for most complainants (after all, DG COMP has EU-wide powers and adopt EU-wide remedies), but its relevance will be challenged by the DMA, as well as by more aggressive national authorities unless it is able to streamline its processes. Whether DG COMP can improve on that front is a debate worth having. In the meantime, DG COMP should make greater use of interim measures, which is an important tool in industries where there may be circumstances where regulators need to act swiftly and decisively.

Photo by Lee Ferrell on Unsplash

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