The EU is currently consulting on major changes to its rules for technology companies.
New competition law tools
In the area of competition law, the Commission is proposing a new tool to combat emerging risks to fair competition.
This proposal aims to address the following problems
- increasing market concentration particularly in digital markets, with a few large platforms becoming gatekeepers for both digital and on-digital products and services.
- algorithm-based technological solutions that facilitate monitoring of competitors' activities.
Existing competition law tools focus on (a) anti-competitive agreements and concerted practices, and (b) abuse by a company of a dominant market position. EU law-makers explain that these tools need to be supplemented to tackle activity that falls in the gaps. Activity like monopolisation strategies by non-dominant companies that nevertheless have market power, and leveraging from one market into adjacent markets are highlighted. Four approaches are suggested:
- Option 1: identification of problems due to a single player becoming dominant as they arise, and intervention before negative market effects become a reality.
- Option 2: As Option 1, but restricted to certain sectors, such as digitally-enabled markets.
- Option 3: identifying structural problems that cannot be addressed by the existing approaches, using a test when a structural risk for competition or a structural lack of competition prevents proper market functioning.
- Option 4: As Option 3, but limited to specific sectors.
Unlike existing competition law tools, these would not involve the heavy sanctions that currently arise.
New controls on gatekeeper platforms
In parallel, the EU Commission is consulting on a proposed regulatory instrument applicable to very large online platforms acting as gatekeepers.
Following the introduction of the new Platform-to-Business regulations (discussed here) this new law would tackle the control that large online platforms can exert over business ecosystems, meaning that innovative new services simply cannot gain a foothold. Policy options include:
- revisions to the Platform-to-Business regulations, imposing tougher controls where these might be helpful in ensuring a level playing field.
- measures to require large online platforms to provide a new regulator with information about their business practices and the effect on users.
- specific regulation aimed at powerful online platforms, identified on the basis of factors like user numbers and ability to leverage data across various markets. This might take the form of blacklisting trading practices that are seen as particularly unfair (such as self-preferencing), or tailored remedies like forcing the sharing of non-personal data, personal data portability and interoperability requirements.
These proposals are at an early stage, but are likely to progress to legal changes eventually. This is an important opportunity to influence their direction, particularly for smaller, disruptive players that struggle to make their way against the dominant tech giants.