The Digital Markets Act: European Precautionary Antitrust
GAICIL Insights
The European Commission wanted digital markets to be “fair and contestable,” and proposed special rules for a narrowly defined set of gatekeepers. The report calls this a paradigm shift for antitrust.
It warns that, contrary to its intent, the proposal would deter innovation and hold back small and medium-sized firms. That warning now shapes debate over extending such rules to AI.
Abstract
The European Commission has set out to ensure digital markets are “fair and contestable.” But in a paradigm shift for antitrust enforcement, its proposal would impose special regulations on a narrowly defined set of “gatekeepers.” Contrary to its intent, this will deter innovation—and hold back small and medium-sized firms—to the detriment of the economy.1
Conclusion
This report discussed the most problematic aspects of the DMA. Some other aspects that have not been covered represent either no real concern or concerns of a lesser extent. For instance, Article 12 of the DMA imposes an obligation for gatekeepers to inform the Commission about concentration. Contrary to a direct prohibition of mergers, this proposal appears quite sensible and proportionate. Also, the market investigation rules in Chapter IV of the DMA are justified as long as they help the Commission gather evidence and engage in fact-finding exercises.
However, the Digital Markets Advisory Committee, created with Article 32 of the DMA and composed of representatives of EU member states, constitutes a worrying politicization of the competition enforcement process. How could the bigger member states not have a more influential voice in such a committee? How can such a committee avoid politically-driven competition decisions with a real risk of protectionism? This committee reintroduces politicization over competition law issues at a time when antitrust populism is least needed.
Takeaway: Contrary to its intent, this will deter innovation—and hold back small and medium-sized firms—to the detriment of the economy.
Conclusion quoted verbatim from the report.
Notes
- Aurelien Portuese, The Digital Markets Act: European Precautionary Antitrust (Info. Tech. & Innovation Found., May 24, 2021), https://itif.org/publications/2021/05/24/digital-markets-act-european-precautionary-antitrust/. Summary quoted verbatim from the ITIF publication page, https://itif.org/publications/2021/05/24/digital-markets-act-european-precautionary-antitrust/. ↩
Cite as: Aurelien Portuese, The Digital Markets Act: European Precautionary Antitrust (Info. Tech. & Innovation Found., May 24, 2021), https://itif.org/publications/2021/05/24/digital-markets-act-european-precautionary-antitrust/
Header image: Berlaymont in Brussels (51892897680).jpg by Radek Kucharski from Warsaw, Poland, CC BY 2.0, via Wikimedia Commons.
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