November 30
2020

The book ‘EU Competition Law and the Digital Economy’ represents the publication of the conference proceedings of the XXIX Congress of the Fédération Internationale pour le Droit Européen (FIDE, International Federation of European Law). Since the first congress in Brussels in 1961, FIDE aims at gathering, on a biannual basis, the legal community involved in the enforcement of EU law, such as the judges of the EU’s Court of Justice and representatives of the EU institutions, national governments, legal practitioners and academics. Every congress debates a limited number of topics, currently relevant for the process of EU integration. Every subject is analysed from a comparative perspective: in preparation of every Congress, FIDE’s Board appoints a General Rapporteur and a number of National Rapporteurs (one per EU Member State). The General Rapporteur prepares a questionnaire concerning one of the topics later debated at the Congress. The National Rapporteurs answer the questionnaire, by pointing out national legislation, court rulings and administrative decisions enforcing the EU acquis that is the subject of the questionnaire. The General Rapporteur summarises the answers of the National Rapporteurs in its final report, which is later presented at the FIDE Congress.

The XXIX FIDE Congress, originally planned to take place in May 2020 in The Hague, has been postponed to May 2021, due to the outbreak of the coronavirus pandemic in Europe. Despite the postponement of the conference, the volume edited by Daniel Mândrescu has been published by Eleven International Publishing in an open access format. The volume includes the questionnaire and the final report prepared by Professor Nicolas Petit and Professor Pieter Van Cleynenbreugel, acting as General Rapporteurs, an institutional report from Thomas Kramler (DG Competition, European Commission) and 30 national reports, pointing out trends in the enforcement of EU competition law in the digital economy in different EU Member States. The national reports include contributions from well-known competition law practitioners and experts. In addition to the 27 EU Member States, the volume covers the United Kingdom, Switzerland and Norway too.

The questionnaire included four broad questions, divided into a list of detailed sub-questions. National correspondents and the representative of DG Competition were first asked whether and to what extent the advent of the digital economy has changed the enforcement priorities of the National Competition Authorities (NCAs) and the European Commission. Most of the national reports have pointed out that the majority of competition authorities have a limited enforcement record in the digital economy, primarily sanctioning price parity clauses imposed by online booking platforms and refusal to supply by dominant online platforms. Only the European Commission and a number of NCAs from ‘large’ EU Member States (Germany, France, Italy, UK and Spain) have actively investigated abusive behaviours by Google, Apple, Facebook, Amazon and Microsoft (the so-called ‘GAFAM’). The general report also notices that the Member States that have been ‘more active’ in competition policy enforcement in the digital economy have also put forward some legislative proposals to reform their competition acts, in order to make them ‘fit’ for the digital economy (for example, changes to the thresholds of notification in relation to concentrations involving firms active in the digital economy).

The second question asked in the questionnaire was whether and to what extent traditional competition law concepts, such as the relevant market definition and market power should be adapted to the peculiarities of the digital economy. From this point of view, a general consensus emerged that the traditional principle of substitutability to define the relevant market does not match the peculiarities of the digital economy, usually characterised by direct and indirect network effects, and no NCA has so far identified a valid ‘alternative’ method to define the relevant market in the digital market. In particular, proposals to define the product market in terms of quality, rather than price substitutability, have been put forward by a number of economists, but they have never been applied in concrete cases by any competition agency. Similarly, while the majority of the rapporteurs agreed that the market share is not a relevant factor to define market power in the digital economy, competition authorities still mostly rely on this factor in their competition law assessment.

National rapporteurs have also pointed out that the NCAs have mostly relied on traditional/well-established theories of harm in competition law investigations in the digital economy, rather than sanctioning ‘new’ types of anti-competitive conducts (question no. 3). Similarly, competition agencies have rarely adopted ‘new’ types of competition law remedies in the digital economy (for example, mandatory data access obligation); the majority of the authorities have rarely ‘stuck’ to the traditional cease and desist orders coupled with a fine, in order to ensure the deterrence of competition law infringements by digital platforms. Finally, while economic efficiencies are well accepted in the competition law analysis, competition authorities still have limited experience in applying such efficiency defences to the digital economy.

The last section of the questionnaire concerned the overlap between ex-post competition law enforcement and ex-ante regulation in the digital economy (data and consumer law protection). In principle, these different areas of the EU acquis are complementary, rather than being mutually substitutable. During recent years, however, possible overlaps among these EU policies have increased: the General Data Protection Regulation (GDPR), the Platform to Business Regulation and the Geo-Blocking Regulation aim at protecting users in the online world, but they also include several aspects that overlap with existing competition rules. An open question is ‘what road to take’: the national reports have pointed out that a number of Member States have recently merged the functions of competition and consumer law protection into the same authority (Italy, UK, Poland, the Netherlands), while in other Member States the NCA has memorandum of understanding with the data protection regulator. The digital economy calls for strengthened cooperation between different authorities and a revision of the traditional division between ex-ante regulation and ex-post competition policy.

The book is highly topical, especially taking into consideration the growing number of competition law investigations in the digital economy. The added value of the volume is represented by its comprehensive approach: the book represents the first ‘picture’ of the competition enforcement trends in Europe in the digital economy. The majority of the literature has focussed on the recent DG Competition decisions in the digital economy, while the experience of the ‘small’ EU Member States has been mostly neglected. In particular, it is worth noticing that the 30 national contributions are structured in the light of the questionnaire designed by the General Rapporteurs, which thus represents a coherent framework of analysis.

The book is a ‘work in progress’: due to the large number of competition law investigations in the digital economy, the main finding of the book might soon be outdated. In this regard it is worth noticing that, in his contribution, the Institutional Rapporteur from the European Commission has argued that EU competition law is ‘technology neutral’, and thus it can be enforced in the digital economy without any substantive legislative change. By contrast, in June 2020, the European Commission launched two public consultations concerning a New Competition Tool (NCT), which should strengthen the ability of the Commission to adopt interim measures in the contest of competition proceedings in the digital economy, and a Digital Services Act (DSA), aiming at introducing new ex-ante regulation for digital gate-keepers. The Commission is expected to put forward two new legislative proposals by the end of 2020. The divergence between the ‘technology neutral’ approach argued by Institutional Rapporteur and the recent NCT and DSA proposals show that, even within the European Commission, there is an ongoing debate on whether and to what extent EU competition policy should be adapted to the realities of the digital economy and eventually supported by new ex-ante regulation. The DSA and the NCT will certainly be the subject of intense debate at the FIDE Congress. From this point of view, the postponement of the Congress to May 2021 actually comes at the right time. It will give the opportunity to the editor of the book and the General Rapporteurs to update the volume after the Congress takes place in The Hague in May 2021.

 

Marco Botta is a Research Fellow at the European University Institute, Florence (Italy) and an Affiliated Research Fellow at the Max Planck Institute for Innovation and Competition, Munich (Germany).

 

 

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