Controlling the gatekeeper: the Commission's digital regulation revolution?

On 2 June 2020, the European Commission launched three consultations that will impact the digital economy. These measures are part of the Commission’s broader efforts in the digital sphere, including through the introduction of the Digital Services Act ("DSA”) package later this year (look out for our detailed update on this, coming soon). Stakeholders have until 8 September 2020 to give feedback.

• The DSA Package consultation for an ex ante regulatory instrument seeks to address the market power of large platforms acting as ‘gatekeepers’. As foreshadowed in the Communication on Shaping Europe’s Digital Future, the Commission is committed to exploring “ex ante rules to ensure that markets characterised by large platforms with significant network effects acting as gate-keepers, remain fair and contestable for innovators, businesses, and new markets entrants”. To this end, proposals have varying degrees of regulatory ‘teeth’ and enforcement consequences. At one end of the spectrum, the Commission’s measures focus primarily on enhanced transparency regarding current and emerging platform practices. On the more ‘interventionist’ end, the Commission could adopt a flexible framework that ‘blacklists’ practices. This framework could allow the Commission to impose tailor-made remedies on a case-by-case basis, including platform-specific non-personal data access obligations, specific requirements regarding personal data portability, or interoperability requirements.
• The DSA package consultation for the deepening of the Internal Market focuses on the responsibility of all online platforms (with or without market power) regarding their users’ safety and fundamental rights.
• The Commission is also consulting on a ‘new competition tool’ that will give the Commission powers to conduct market investigations similar to the current powers of the UK’s Competition and Markets Authority. These new investigative powers seek to address structural competition problems in ‘tipping markets’ (markets that weigh heavily in favour of one powerful player primarily due to network effects, but where no clear dominance has yet been established), which are outside the scope of the EU competition rules or cannot be addressed effectively using existing tools. The Commission plans to use the new tool to investigate both markets at risk of ‘tipping’ and markets that do not deliver competitive outcomes even without anti-competitive conduct. While there is no doubt that this new set of powers will be used to complement the Commission’s existing toolbox, important questions remain, including about the type of remedies the Commission will be able to impose and the burden of proof in such sectoral investigations.