11 May 2022

Bruegel: Insights for successful enforcement of Europe’s Digital Markets Act

The European Commission will enforce digital competition rules against big tech; internally, it should ensure a dedicated process and teams; externally, it should ensure cooperation with other jurisdictions and coherence with other digital policies.

The European Union’s Digital Markets Act, agreed in principle at EU level in March 2022, will give the European Commission new enforcement powers that could shape the business models of some big tech companies. The Commission will oversee 21 new competition rules that an estimated 14 digital ‘gatekeepers’ – platforms such as Google and Microsoft that business and consumers find it hard to avoid – must adhere to. The new rules deal with various digital issues in a borderless digital economy and will have potentially global ripple effects. How the Commission organises itself as an enforcer of the new rules will therefore be widely watched. The Commission must define how to implement the rules and will need sufficient resources and skills, plus external cooperation with other jurisdictions and digital regulators, to deal with the intense workload.

Internal implementation

The Digital Markets Act (DMA) is an initiative of the Commission’s digital policy department (DG CONNECT), rather than its competition department (DG COMP). However, DMA rules draw from past and current competition cases. The Commission must therefore define an internal setup involving both departments, to allocate the skills and resources that will ensure that gatekeepers comply.

The Commission and ‘gatekeepers’ will also have to cooperate in the context of a dialogue to secure effective compliance. Although the dialogue isn’t mandatory, it might give gatekeepers a greater chance to comply with DMA rules. Without dialogue, the risk of non-compliance is higher and there could be a greater chance the gatekeeper will seek legal redress against a Commission’s non-compliance decision. However, dialogue will take place on a case-by-case basis and will be time-consuming because of the need to conduct market investigations and get feedback from market participants. Gatekeepers might also try to influence the Commission to act in their favour due to close relationships with regulators and asymmetric information.

Against this backdrop, the Commission should issue guidance to clarify how gatekeepers should comply with the rules. This approach will ensure greater legal certainty and will be less resource-intensive and time-consuming for both the firms and the Commission. It will also reduce risks of gatekeepers securing undue influence over the Commission, as it will reduce the need for case-by-case discussions between the Commission and gatekeepers.

Nevertheless, dialogue might still be necessary in some cases to tailor measures to the business model’s needs – relating to specific privacy and security features of platforms, for example. In this case, the Commission should change its team frequently to avoid the risk of complacency during the dialogue while ensuring safeguards against ‘a revolving door’ between gatekeepers and the Commission, if these aren’t already in place.

Dedicated teams

DG CONNECT does not have competition-related expertise and will thus need DG COMP’s resources and expertise. This requires allocation of work between monitoring and enforcement teams. Whether the DMA achieves what it is meant to achieve depends critically on the enforcement team, and less on the monitoring team, because without proper enforcement, the regulation is a dead letter. The enforcement team’s resources and skills will therefore be the key to an effective DMA.

Allocation of work between monitoring and enforcement teams

DG CONNECT and DG COMP implement, respectively, digital policies and competition policies. DG CONNECT is thus best placed to define competition rules to achieve digital goals, while DG COMP is best placed to enforce them. Therefore, DG CONNECT should provide the DMA monitoring team as it has digital strategy expertise. DG COMP should...

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