Much of the European Commission’s long-awaited experts’ report on “Competition policy for the digital era” was anticipated and was therefore not surprising. But some details and omissions show what may lie ahead. The real questions are, however: will the EU succeed in implementing its ideas in the global digital market, and will competition be the chosen policy to do so? Time will tell.

Andrea Tognoni
Consultant

What the report is …

The report was meant to set out priorities for the next Competition Commissioner to make EU competition policy fit for purpose in a data-intensive economy. It is a sort of legacy by Margrethe Vestager for her successor, but also a first electoral pitch to the Brussels bubble, to show that she and the EU are serious about working for consumers, markets and tech players in the EU.

Overall, the report finds that EU competition policy is strong in its fundamentals, so it just needs to be tweaked, not overhauled. It suggests imposing more responsibility on the big tech players, which are criticised in some quarters as economic free riders.

The report suggests the EU should generally shift the burden of proof onto those tech giants to prevent them from abusing their market dominance. This may mean relaxing the need to measure consumer harm by platforms, focusing instead on consumer welfare; shifting the focus from defining the market to identifying harm to it; and duly factor access to data of other players to assess market power case by case. The aim would be to get proof of and allow pro-competitiveness conducts whilst – when in doubt – being severe on anti-competitive behaviour.

… what it is not …

If some were expecting a revealing guide for EU citizens and regulators on how to deal with the digital age and the (mostly US) giants, this is anything but. The report focuses on ensuring competition and protecting markets and its players, notably consumers, without touching on citizenship, democracy, tax fairness or other virtuous goals so often linked to data, tech and competition. The report makes clear that a new public utility regime for data or breaking up big tech is not the way to go.

If the report is not a vision for the digital age, it certainly is a reminder that not even the EU can address all problems with a single tool, even if it may be the only one that seems to be working. The report also pushes back on pressure on competition authorities to be the driver of EU competences. It is therefore yet another call to EU Member States to marshal their will and start thinking as a Union, at least on the global issues that concern them.

… and what it may herald.

We can expect the EU to continue promoting competition for and in the market, notably watching platforms, ensuring they respect GDPR and are responsible when acting as regulators, and intervening to allow “multi-homing” if they do not. We can also expect developments – probably more by jurisprudence than otherwise – on the meaning of the different type of data and access to it for competition in the various markets, to ensure that all players can compete within and with the digital ecosystems created by big tech. This could be by imposing interoperability on them rather than breaking them up.

Concretely, the EU will likely shape stricter regimes of data access; update concepts of harm in M&A rules for start-ups and dominant players, to avoid “killer acquisitions”; analyse how data pooling benefits or damages competition – via letters of no infringement or guidelines; and perhaps come up with a block exemption regulation on data sharing/pooling, or even shaping other sectorial regulation imposing duties of interoperability and access to serve complementary or aftermarkets.

Less concretely, as Vestager supports an EU digital tax in electioneering speeches, or speaks on broader topics such as trade, EU industrial policy or global innovation, while other arms of the EU Commission issue guidelines on making AI ethic, any calls for a more political competition policy or European digital champions will likely fall on deaf ears. Why? Because all these policies, regardless of how paramount and effective in shaping the EU’s market and identity are only pieces of a puzzle that EU Member States need to crack. Only after the European Parliament elections in May and the formation of the new Commission, will we learn whether the competition portfolio will be the guiding light of the EU.