How quickly times are changing! Some six months ago I mentioned in the TTP editorial that “there was growing belief amongst regulators that competition may not be working effectively in technology markets” and that a “radical overhaul of competition law” was needed. Fast forward to November 2020, and we are eagerly awaiting the publication by the European Commission of new draft legislation (announced for 9 December), to improve the enforcement of rules to counteract perceived novel problems posed by digital service providers.
The Commission will propose rules to address the risks faced by users of platforms and enable effective enforcement, the Digital Services Act (“DSA”, see also here). In this context, the European Commission will also propose the so-called New Competition Tool (“NCT”), which will include powers to impose ex ante measures on digital platforms even in the absence of demonstrated abusive conduct. The DSA and NCT shall ensure effective competition and prevent unfair and anticompetitive trading practices, such as self-preferencing, anti-steering, tying & bundling, and unwillingness to share data by large online platforms that can be regarded as “gatekeepers”, which as per the Commission “set the rules of the game for their users and their competitors”.
Ultimately, the proposals by the Commission are all about closing the alleged enforcement gap that currently exists according to the Commission.
Some might note, though, that talk of an enforcement gap is exaggerated. As I have mentioned earlier, it seems that ensuring effective competition first and foremost requires practical measures and that competition authorities will have increasing appetite to bring cases against technology companies in the future. And authorities have shown lately that they are not shying away from taking on platforms in particular:
The European Commission recently opened investigations into Apple over App Store rules and Apple Pay. The first follows a complaint filed by Spotify in March 2019, whereby the music streaming service took issue with Apple’s 30 % commission levied on in-app purchases. Apple responded by announcing a new App Store Small Business Programme, dropping the commission to 15 % under certain circumstances.
National competition authorities are not holding back either: The German Federal Cartel Office has opened a second investigation into Amazon, this time focusing on how the company influences pricing on its marketplace. According to the FCO, it received numerous complaints from merchants regarding Amazon's conduct. In similar fashion, the Polish Office of Competition and Consumer Protection has commenced an investigation into leading online marketplace provider Allegro, following complaints related to unfair conditions of engagement between Allegro and sellers.
The battle between technology companies and competition law legislators and enforcers has always been fascinating. Ultimately, it is about driving innovation for the benefit of consumers. We therefore cannot wait to see the next round. Bring it on!