Short Reads

Digitisation and competition law: past, present and future

Digitisation and competition law: past, present and future

Digitisation and competition law: past, present and future

07.02.2019 EU law

It is nearly time for the European Commission to reveal its course of action in digitisation and competition law. Feedback from a public consultation and the recent conference on 'Shaping competition policy in the era of digitisation' together with the upcoming expert panel's report on the future challenges of digitisation for competition policy are likely to shape the Commission's course of action.

When looking at past practice [see our overview of 2018 key developments], companies should brace themselves for potentially more regulation and 'modernised' enforcement by authorities looking beyond the traditional competition rules to fix the potential anti-competitive risks of digitisation.

Even though no definite stance has been taken yet and more will be revealed in the upcoming publication of the expert panel's report, the Commission is likely to also look at past practice to decide on the future of competition law in the era of digitisation.

In the past [see our overview of 2018 key developments with summaries and take-aways], the Commission resolved potential 'gaps' in competition law enforcement by introducing complementary regulatory measures, such as the Geo-blocking Regulation and the upcoming P2B Regulation. These type of complementary measures may also be used in the future. As a result, the lines between competition law and other interests, such as consumer protection, data protection, innovation safeguards and the protection of fairness, may become increasingly blurred. This is, however, not an entirely new phenomenon when looking at, for instance, the growing awareness among various competition authorities that competition rules and consumer protection issues are sometimes so intertwined that they need to be assessed jointly within the context of fairness. Consumer inertia or vulnerability may lead to unfair results, even in competitive markets, which may potentially require complementary measures, outside competition law, to reach a fairer outcome.

Another likely adjustment that follows from the past relates to the EU merger regulation. Additional rules to take account of 'killer acquisitions', acquisitions by dominant companies of innovative start-ups which negatively affect innovation, could be introduced. Suggestions to address these kind of acquisitions include the introduction of a value-based notification threshold, an increased focus on innovation during the substantive merger assessment or a shift in the burden of proof for super-dominant firms to convince the Commission that the acquisition will be pro-competitive. A further item that is likely to appear on the Commission's action list is how to deal with the increasing power of platforms. Possibilities currently being considered comprise the adjustment of the essential facilities-doctrine in relation to data access, the introduction of mandatory data-sharing rules or the breaking-up of dominant companies into separate business units. The Commission is also looking into ways to speed up its enforcement actions in the dynamic digital world, for instance by using 'interim measures' in anticipation of the outcome of, what can often be, lengthy investigations. In addition, the Commission is bound to use the evaluation of the Vertical Block Exemption Regulation to provide further clarification on recurring digital issues, such as online sale or online search advertising restrictions and market place bans. A public consultation was launched on 4 February 2019 and interested parties have until 27 May 2019 to provide their input.

What the future will bring is anyone's guess but by looking at what has happened in the past, the Commission's future approach towards digitisation in competition policy is likely to involve speedier enforcement outcomes through complementary regulatory measures and adjusted rules in merger control, online vertical restrictions and in relation to platform power. The rest of the Commission's plans are to be revealed later this year.

 

This article was published in the Competition Law Newsletter of February 2019. Other articles in this newsletter:

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