Making sense of NCAs’ roles under the DMA – The Dutch proposal

In the run-up to the enactment of the EU’s Digital Markets Act (DMA), the European Commission strongly defended its exclusive jurisdiction to enforce it. Despite valiant efforts on the part of several national competition authorities (NCAs) who wanted a formal role enforcing the new rules, the Commission’s exclusive competence remains largely in place in the final text.

However, NCAs have been given a role in assisting the Commission. More significantly, under Article 38(7), Member States can grant their NCA the competence and investigative powers to investigate non-compliance with the DMA. According to Recital (91) of the DMA, this could in particular be relevant where it is unclear from the outset whether a gatekeeper’s behaviour is capable of infringing the DMA or the competition rules.

Last week saw some significant developments in tis area. The German Government indicated in its enforcement priorities for the DMA that it will give its competition authority the power to conduct DMA investigations in the anticipated 11th Amendment of the Act Against Restraints of Competition. The Dutch Government was however first to the post, becoming the first Member State to consult on draft legislation to give its NCA, the Authority for Consumers and Markets (ACM), such powers. It is safe to say that the Dutch do not want the ACM to be a wallflower in the context of the DMA: the proposal is punchy and gives the ACM powers that exceed those of the Commission.

The role of NCAs under the DMA

The Commission is the “sole enforcer” of the DMA. That means that only the Commission can initiate formal proceedings which can lead to binding decisions specifying measures the gatekeeper has to adopt, finding non-compliance, and imposing fines.

The DMA envisages a role for NCAs in assisting the Commission with this enforcement. As already happens when the Commission investigates infringements of competition law, the NCAs can assist the Commission with interviews and inspections, including obtaining any necessary judicial warrants for inspections. In addition, the Commission can appoint officials from an NCA to assist in the monitoring of obligations that apply to gatekeepers and to provide specific knowledge and expertise to the Commission.

Anyone who has a complaint about potential non-compliance with the DMA can file such a complaint with an NCA or directly with the Commission. Indeed, the threshold for informing the “local” NCA may well be perceived to be lower by some complainants than going straight to the Commission, which is why it is good that this option exists. If the NCA determines, based on the complaint, that there may be an issue of non-compliance, it will transfer the information to the Commission. The NCAs and the Commission are not under any obligation to respond to follow-up on complaints received.

There is a general duty on NCAs and the Commission to cooperate with each other and inform one another on enforcement initiatives, whether this concerns enforcement of the DMA or of the competition rules (the DMA therefore recognises that some practices could infringe both the DMA and the national competition rules – see Recital 91). Rules on cooperation were introduced following the bpost and Nordzucker judgments, to ensure the Commission and NCAs do not breach the ne bis in idem (double jeopardy) principle. They will include the power to share confidential information, and any information exchanged under the DMA may only be used for the purpose of coordination of the enforcement of the DMA and the national competition rules.

The most interesting provision from the point of view of NCAs is, however, Article 38(7) of the DMA. Under this provision, an NCA may, on its own initiative, conduct an investigation into non-compliance with the DMA, if national law gives it the power to do so. If the NCA intends to launch such an investigation, it must first inform the Commission in writing. If the Commission launches its own investigation, the NCA has to end its inquiry. The NCA will report to the Commission on the findings of its investigation.

On its face, this power for NCAs to conduct investigations is toothless, given their inability to adopt decisions that the DMA has been infringed and to impose fines. However, it should be recalled that there will often be an arguable case under Article 102 (and/or its domestic equivalent) when there is a potential infringement of the DMA, so an investigation under 38(7) of the DMA could have serious consequences for the gatekeeper even if it does not ultimately lead to enforcement by the Commission: the NCA could decide to launch its own inquiry on the basis of an alleged abuse of a dominant position by the gatekeeper, which is allowed under Article 1(6) of the DMA, subject to the ne bis in idem principle.

The Dutch proposal

On 13 March 2023, the Dutch Government issued a consultation in relation to a draft Bill that would give the ACM the power to conduct investigations under Article 38(7) of the DMA. The proposal is short but gives the ACM broad powers of investigation, some of which exceed those of the Commission.

First, the ACM will essentially be able to use all powers of investigation that are usually at its disposal in Dutch competition cases. This means that if the ACM is investigating a breach of the DMA under Article 38(7), it can send formal requests for information and carry out inspections.

Those inspections are not limited to offices, but include domestic premises, provided a warrant is obtained. This is interesting, as the Commission itself would only be entitled to inspect business premises, whereas the ACM would be able to enter and search a home as well.

Another key point is that under Dutch law, there is a general duty to cooperate with any inspection, which applies also to any questions asked (except where answering a question would be self-incriminating). This means that if the ACM investigates a potential breach of the DMA, it can compel a representative of a gatekeeper to answer questions, whereas the Commission can only carry out an interview by consent.

A breach of the general duty to cooperate (whether by a company or an individual) can lead to administrative fines, but in more serious cases also criminal prosecution. According to the Dutch Government, it is necessary to make these sanctions applicable in DMA investigations carried out by the ACM, since the DMA contains no provisions dealing with non-cooperation by gatekeepers that are under an Article 38(7) investigation.

Finally, the Dutch proposal explicitly states that any information the ACM obtains in a DMA investigation can be used for its other functions. Therefore, if the ACM initiates an investigation into a DMA infringement, but concludes that there is no DMA concern, it can still use the information it obtained in different contexts, such as consumer law or competition law enforcement. Similarly, if the ACM reports its findings to the Commission, but the Commission decides not to take any action against the alleged breach of the DMA, the ACM is free to use the information for an investigation under Article 102 TFEU and its Dutch equivalent, or under consumer law.

An example for other Member States

The Dutch proposal is a clear endorsement of the DMA and the role NCAs can play in its effective enforcement. Clearly, the Dutch government has prioritised effectiveness in putting the ACM in the same position as exists in competition law, where equally it can investigate breaches of European competition law with powers that go further than those of the Commission (namely, compulsory interviews). The investigatory powers granted to national agencies under domestic legislation are a matter of national administrative law if the EU regulation they relate to does not itself specify how national agencies are to enforce the rules.  

With respect to the ACM’s ability to use information obtained in a DMA investigation when using other enforcement tools, it is important to note that the main goal of a DMA investigation is to “report to the Commission on the findings of such investigation in order to support the Commission in its role as sole enforcer of [the DMA]” (DMA, Article 38(7)). However, as the DMA also recognises, there will be “cases where it cannot be determined from the outset whether a gatekeeper’s behaviour is capable of infringing this Regulation, the competition rules which the national competent authority is empowered to enforce, or both” (DMA, Recital (91)). I would add that in some cases there may also be potential infringements of consumer laws.

While the primary objective for the NCA should be to report to the Commission on its findings with respect to compliance with the DMA, if this does not lead to Commission action, the NCA should be able to reach its own conclusions on whether to take action under national competition or consumer powers. It would be inefficient and artificial to restrict the NCA from using the information it obtained in its DMA investigation if the Commission does not wish to pursue the matter. Indeed, it cannot “unlearn” what it found out during the DMA investigation.

Other Member States will no doubt follow with their own legislation giving NCAs the power to investigate non-compliance. It is to be expected that the larger Member States who have been vocal about the DMA will do so, and Germany has already indicated that its Bundeskartellamt will be given powers to investigate under the DMA in the anticipated 11th Amendment of the Act Against Restraints of Competition. It would be interesting to see if Member States where gatekeepers are domiciled, like Ireland and Luxembourg, will do the same.

The Dutch proposal can be a model for these Member States in its combination of simplicity and effectiveness. The fact that the ACM is given the same powers it would have when investigating competition infringements should be seen as a ringing endorsement for the DMA from the Dutch Government.

Stijn Huijts is a Partner at Geradin Partners, qualified to practise law in the Netherlands. Photo from Unsplash.

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