Rovshana Ismayilova
Senior, Ankara University Faculty of Law
The increasing proliferation of digital markets and the increasing importance of data led competition authorities to agree on the need for much broader harmonization. Considering that the existing tools and methods are insufficient, especially for the actors in the digital economy, new regulations have been introduced. Article 102 of the Treaty on the Functioning of the European Union (hereinafter “TFEU”), which regulates abuse of dominant position in European Competition Law, is incomplete due to the fact that it is applied after the infringement occurs and requires the definition of the relevant markets.[1] Therefore, the European Commission (hereinafter “Commission”) introduced the Digital Markets Act (hereinafter “DMA”) in order to ensure fairer and more competitive digital markets on November 1, 2022, and made it applicable on May 2, 2023.[2]
The DMA is intended to intervene ex-ante in the actions of undertakings in the digital sectors. However, this intervention will not apply to all undertakings in the digital sectors, but only to those undertakings that (i) provide one of the “core platform services” listed in the DMA and (ii) meet the quantitative thresholds[3] set by the DMA. Hence DMA is expected to guide the conduct of a number of powerful digital companies, also known as the “gatekeeper undertakings". Digital markets are characterised by three key aspects: the role of data, increasing returns to scale and network effects, and thirdly, economies of scope.[4] Accordingly, the core platform services regulated in the DMA are as follows: online intermediation services, search engines, social networks, video-sharing platforms, messaging services, operating systems, web browsers, virtual assistants, cloud computing services, and some categories of online advertising services that are connected to one of the other core platform services.[5]
Platforms that will be designated as gatekeepers by the Commission will have to comply with the obligations set for them in Art. 5 and 6 of the DMA. Subsequently, if a platform obliged to fulfil Articles 5 and 6 can be deemed to be in a dominant position, it can be prima facie presumed to be in breach of TFEU Art. 102, except for those who are considered gatekeepers but are not in a dominant position in their field/sector. Furthermore, a gatekeeper undertaking can simultaneously fulfil the criteria that must be proven under Art. 102. In such cases, although both routes lead to a similar result, the procedural and substantive shortcuts offered by the DMA might make it preferable, keeping in mind that the DMA provides an ex-ante investigation. However, the Commission's choice of one of these two routes may lead to differences in the compensation for harm. If a platform in a dominant position is investigated under Art. 102 and found to be abusive, the EU-wide Compensation Directive would be invoked. Furthermore, the burden of proof for proving a breach of the requirements under DMA is lower than that of establishing a breach of Art. 102[6] (which must be conducted by following proof of harm and establishing a causality link between the abuse and the harm). However, where the Commission decides that an undertaking is simultaneously subject to one or more of the obligations defined under the DMA, it is unlikely that an Art. 102 action will be brought against a dominant gatekeeper by prioritising the DMA. Also, for digital platforms that meet the gatekeeper thresholds but do not have a sufficient market share to be considered dominant under Art. 102, enforcement through the DMA would certainly complement the enforcement of EU competition law by eliminating national authorities’ enforcement activities. Consequently, the DMA does not limit the scope of application of Art. 102 but provides an additional tool for enforcement.
The Commission will be the sole competent body to enforce the DMA[7] and any National Competition Authority (hereinafter “NCA”) is not authorized to adapt decisions under DMA; however, an NCA can assist upon the Commission’s request in carrying out market investigations and inspections.[8] Nevertheless, if an NCA intends to launch an investigation on a gatekeeper undertaking according to the conventional competition rules, the Commission should be informed beforehand.[9] As regulated in the DMA, this would also be the case if an NCA seeks to impose obligations on gatekeeper undertakings based on their national rules.[10] On the other hand, this does not affect the ability of the NCAs to investigate non-gatekeeper undertakings’ infringements of Art. 102 TFEU and parallel national rules prohibiting the abuse of dominance. Besides that, NCAs have an unlimited power to investigate gatekeepers' conduct that is not specifically prohibited by the DMA but may nevertheless constitute an abuse of dominance.[11]
The DMA was not established to introduce new obligations under competition law that do not already exist. Instead, it is designed to prevent new obligations that Member States may impose.[12] However, as Member States are prohibited from enforcing further fairness-related restrictions on gatekeepers, and as the DMA is the sole competent authority, the DMA's fairness component has the greatest effect. This is due to the desire to ensure not only fairness and competitiveness but also predictability for gatekeepers, which is inherent in the EU's broad competences to regulate the internal market. In other words, the authorities are prevented from being solely at the discretion to impose any measures to remedy the infringement committed by the undertaking as a result of a possible investigation. Pursuant to the DMA, the variety of obligations that may be envisaged by the authorities is determined as numerus clauses. This development is expected to increase predictability for undertakings.
Given that the DMA entered into force in 2023, the Commission has so far identified certain undertakings as gatekeepers (Apple, Google, etc). Up until now, there is currently very limited data on possible scenarios where Art 102 and the DMA might collude. The evolution of the issue will become clearer over time, as more case law from both the Commission and the NCAs becomes available. It remains to be seen how this back and forth between the new regulations and conventional means of competition law in digital markets turns out.
References
[1] Francesco Ducci, ‘Gatekeepers and Platform Regulation Is the EU Moving in the Right Direction?’ (SciencesPo 2021)
[2] Regulation (EU) 2022/1925 Of The European Parliament And Of The Council of 14 September 2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Markets Act) [2022] OJ L. 265/1.
[3] As Artcile 3(2) of the DMA states that: as regards paragraph 1, point (a), where it achieves an annual Union turnover equal to or above EUR 7,5 billion in each of the last three financial years, or where its average market capitalisation or its equivalent fair market value amounted to at least EUR 75 billion in the last financial year, and it provides the same core platform service in at least three Member States;
[4] Jacques Cré mer, Yves-Alexandre de Montjoye and Heike Schweitzer, ‘Competition Policy for the Digital Era (Final Report)’, European Commission 2019) p. 15.
[5] Rec. 13, 14 Digital Markets Act.
[6] Akman, “Regulating competition in digital platform markets: a critical assessment of the framework and approach of the EU Digital Markets Act”, (2022) 47(1) ELRev 85 at 100-101.
[7] As Recital 91 of the DMA states that ‘[t]he Commission is the sole authority empowered to enforce this Regulation.’
[8] Article 26(2) Digital Markets Act.
[9] Article 38(2) Digital Markets Act.
[10] Article 38(3) Digital Markets Act. It has already been stated that NCAs cannot take decisions based on the DMA. Therefore, this will not be the case unless any national competition authority adopts the DMA regulation into its domestic law and/or enacts its own unique regulation.
[11] Giorgio Monti, ‘The Digital Markets Act – Institutional Design and Suggestions for Improvement’ (2021) TILEC Discussion Paper 15.
[12] For a comparison between the obligations under the DMA and under competition, see eg, Assimakis Komninos, ‘The Digital Markets Act: How Does it Compare with Competition Law?’ (14 June 2022)
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