EU National Competition Authorities publish joint paper on Digital Markets Act, demand stronger role

Europe

The debate about the draft Digital Markets Act (DMA) – the European Commission's flagship project in the digital sector – is intensifying. In May, the self-proclaimed "Friends of an Effective DMA" (i.e. France, Germany and the Netherlands) presented far-reaching proposals to amend the draft.  Now, national competition authorities (NCA) in the EU published a joint-position paper in which they demand a stronger role in DMA enforcement for themselves and for the European Commission's Directorate-General for Competition (DG COMP), and in emphasising the relevance of competition law enforcement in the digital world.

The paper titled How national competition agencies can strengthen the DMA bears the letterhead of the European Competition Network (ECN), a coordination body through which the European Commission and the NCAs cooperate, and raises the following two demands aimed at making the DMA as effective and "future-proof" as possible:

(1) A stronger role for competition authorities in enforcement of the DMA

This stronger role should build on:

  1. the primary application of the DMA by DG COMP at the European Commission;

  2. a complementary possibility of enforcement of the DMA by national competition authorities; and

  3. the establishment of a mechanism for close coordination and cooperation between these agencies, as well as with national courts implementing both the DMA and EU (and national) competition law.

(2) A continuous role for competition law in the digital world in addition to the DMA 

Complementarity between competition law and the DMA should be a guiding principle and competition law should remain at the forefront of open and fair digital markets.

Stronger role of the competition authorities

The NCAs welcome the DMA, which "will be a powerful additional tool to effectively address some of the most harmful behaviours implemented by very large gatekeeper." It is stressed, however, that the DMA, which if adopted will introduce a regulatory framework for digital gatekeepers, draws on the competition-law work conducted by the Commission's Directorate for Competition and the NCAs over the last 20 years in cases such as the Commission's Amazon e-books or Google Android cases, the French ADLC's Google Ads and Google display cases or the German Federal Cartel Office's amazon.de marketplace.

Or as EU Competition Commissioner Vestager put it in a speech on "Defending competition in a digital age" on 24 June:

With the years of experience that we’ve built up through cases, we’re now in a position to design regulation to help tackle harmful behaviour that we’ve seen again and again.

Considering this decisional practice and the experience and evidence gained by competition authorities, the NCAs fiercely advocate an application of the DMA by DG COMP at the European level, supplemented by possibilities for complementary enforcement by national competition authorities. Thus they strongly oppose considerations to transfer the implementation of the DMA to other regulatory authorities, for which there are supporters both in the Commission and in the European Parliament, which argue that the DMA is based on competition law experiences, but does not constitute competition law. To the contrary, the NCAs take the view that effective enforcement of the DMA would "gain tremendously" from making use of the know-how, expertise and experience that the EU competition agencies – consisting of both DG COMP and NCAs – have already accumulated with the digital economy

Regarding complementary enforcement by the NCAs, the paper states that certain DMA enforcement scenarios are well addressed at the national level. NCAs should be able to help the Commission enforce the DMA (e.g. receiving complaints, contributing to dawn raids, gathering information) or to enforce the DMA independently when appropriate. More specially, the national watchdogs propose to follow the "well-established and successful" cooperation and coordination model for EU antitrust as set out in regulation 1/2003 and to work with the ECN, the coordination body that has been tried and tested in the competition-law world for 15 years. However, the NCAs acknowledge that the centre of gravity for DMA enforcement should be at EU level and that the Commission should be solely responsible for some tasks, such as the designation of gatekeepers.

Continuous role of competition law

The NCAs also point out point out that "successful enforcement of the DMA requires it to be implemented through a much wider prism than a sector regulation". As such, the NCAs demand that the DMA should acknowledge the "continuum between competition law and the DMA". According to the NCAs, competition law – including new competition law rules for digital markets introduced by national law makers, such as in Germany, Austria, Greece or Italy – should remain at the forefront of open and fair digital markets alongside the DMA. This complementary approach should not only effectively tackle current problems in digital markets, but also help "future-proofing and updating the DMA" by assessing future conduct not yet included in the DMA under competition law and – if problematic – adding it to the DMA's do's and don'ts.

Importantly, the paper also draws attention to the DMA's private enforcement system through national courts. These national courts could benefit from the experience already gained by the private enforcement of competition law and the multiple actions for damages started since the introduction of the Private Damages Directive.

Overall, the paper makes a strong case for putting the DMA in the hands of competition authorities and using antitrust as the sharpest sword in the fight against competition problems in the digital markets. It finishes with a warning: the legislators should not "underestimate the workload and complexity of the future implementation of the DMA". Drawing upon competition authorities’ knowhow, experience and expertise is key in ensuring the effectiveness of the DMA.

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Björn Herbers, Roderick Nieuwmeyer, Edmon Oude Elferink