G7 Publishes Compendium on Competition in Digital Markets

Competition authorities from the G7, along with a number of guest authorities, have recently published a compendium on competition in digital markets.  The compendium provides an overview of how different authorities are working to promote competition in digital markets and commonalities in the approaches authorities are taking, including where adjacent policy areas (such as data protection) interact with competition enforcement.

The compendium considers various combinations of factors that, in the authorities’ view, could cause digital markets to ‘tip’ in favour of one or a small number of firms.  It notes that weaker competition in digital markets can lead to challenges for competition enforcement and policy.  These challenges include novel theories of harm; the difficulties of fitting complex digital business models into traditional frameworks; and the merits and efficacy of enforcement actions to date. The global nature of the largest digital firms means there is increasing appetite from regulators and policy makers to work together across jurisdictions and disciplines.

The report concludes by highlighting the range of approaches taken by regulators to address competition concerns in digital markets. These include opening investigations, conducting studies and bringing enforcement actions through merger control to address concerns about the market power of platforms; strengthening institutional capabilities by developing specialist teams staffed with technical experts or upskilling existing staff; working on legislative reforms to bolster enforcement tools or introduce an ex ante regulatory regime, or both; and ensuring regulatory cooperation among domestic regulators working in different disciplines (such as data protection, consumer protection and media sustainability) as well as their overseas counterparts.

The report’s emphasis on cross-disciplinary policy-making and enforcement action reflects recent trends in the EU.  For example, in a controversial development last month, Advocate General Rantos issued an opinion inviting the European Court of Justice to rule that a national competition authority may, in exercising its powers, examine and take account of the compatibility of a commercial practice with EU data protection rules.  The opinion, which is non-binding on the ECJ, emphasised the necessity for competition authorities to consult with, and take account of any decision or investigation by, competent data protection authorities.

For further content on the nexus between privacy regulation and competition in the digital sector, please refer to our Regulating Digital campaign.