European Commission mulls new market investigation tool as part of its approach to competition enforcement in the digital world
10/06/2020
The European Commission invites interested parties to submit feedback on a possible new market investigation tool. The tool would greatly expand the Commission’s already existing market investigation powers into perceived structural competition problems and also allow for market-wide remedies.
The new competition tool is part of a recently launched “holistic and comprehensive approach to ensure fair and undistorted competition” in the digital and global world. The approach the Commission has in mind would encompass:
- the continued enforcement of the existing competition rules;
- a possible ex ante regulation of digital platforms (seeking to provide a fair trading environment for platform ecosystems, see our article here); and
- the possible new competition tool to tackle structural competition problems.
Rationale
The Commission had commissioned various studies on how the competition rules cope with the changes and challenges brought by an increasingly digital and global world. Europe’s antitrust enforcer identified structural competition problems which – in the Commission’s view – cannot be tackled effectively using the current competition rules. The Commission grouped the structural problems into two categories depending on whether harm is about to affect the market or has already affected the market:
- structural risks for competition referring to scenarios where certain market characteristics (examples being network and scale effects, lack of multi-homing and lock-in effects) and where the conduct of the companies create a threat for competition;
- structural lack of competition where a market does not deliver competitive outcomes due to its structure.
Design options for the new tool
The Commission considers four options that are described in more detail in its inception impact assessment. The options differ in market scope as well as target scope.
- Market scope: options 1 and 3 would apply to all markets whereas options 2 and 4 would only apply to a few markets being most prone to structural problems (i.e. digital or digitally-enabled markets);
- Target scope: options 1 and 2 would address unilateral conduct by dominant companies only whereas options 3 and 4 would cover all identified structural competition problems.
Remedy options under the new tool
The Commission would refrain from finding an antitrust law infringement, and thus would not impose any fines. As such, the new competition tool would not provide a basis for follow-on private damage claims.
However, for all options discussed, the Commission would have the power to impose certain (aligned) obligations on companies, i.e. behavioural and structural remedies. Such tools are pretty significant and have potentially far-reaching effects on the companies addressed. They would significantly expand the regulator’s toolbox, in particular given that the Commission’s intervention would not be based on an established theory of harm pursuant to Article 101 TFEU (prohibited anti-competitive agreements) or 102 TFEU (prohibited abuse of a dominant position) but rather on a perceived structural problem of a particular market.
What are your options to get involved?
The EC has published a roadmap for the adoption of this new tool planned for the fourth quarter of 2020. The Commission now consults stakeholders from the public and private sector. You can submit comments regarding the EC’s inception impact assessment until 30 June 2020 and contribute to the public consultation until 8 September 2020. The EC also provides the possibility for stakeholders to upload a paper explaining their position.
Do you have questions? Please contact: Dr Jens Peter Schmidt, Dr Fabian Hübener
Practice Groups: Antitrust & Competition, Digital Business
