Commission eyes US GAFA hearing for future competition challenges

shutterstock_1532824832 [GAFA Shutterstock]

The heads of US tech giants Facebook, Amazon, Google and Apple are set to testify in a US congressional hearing on Wednesday (29 July) as part of an ongoing probe into the dominance of digital platforms. For the EU, the hearing could provide a valuable insight into how to address competition challenges in the digital economy.

Wednesday’s case, which is being led by the US House Judiciary Antitrust Subcommittee chaired by Democrat Jerry Nadler, will bring Amazon’s Jeff Bezos, Apple’s Tim Cook, Google’s Sundar Pichai, and Facebook’s Mark Zuckerberg in front of members virtually, to address whether the firms engage in anti-competitive practice to the disadvantage of smaller rivals.

In Brussels, the European Commission is working on a new competition tool ‘fit for the digital age’ which it hopes will seek to remedy market disparities in the digital economy. And Wednesday’s hearing could offer up some valuable insights into how the platforms assess the dominance of their market positions.

A Commission spokesperson informed EURACTIV on Monday (27 July) that the executive is “closely following” developments stateside, and that the ongoing probe by the House Judiciary Antitrust Subcommittee will “contribute to our own reflections on how to tackle the challenges for competition enforcement in digital markets in an effective and timely manner.”

“This includes our ongoing impact assessment for a new competition tool, but also our reflections on clear-cut and targeted ex-ante regulation for digital gatekeeper platforms,” the spokesperson said.

New Competition Tool & Ex-Ante Rules

Earlier this year, the Commission announced they would unveil a new competition tool before the close of 2020. The tool will be designed to mitigate structural risks in markets as well as intervene in situations whereby a market is close to tipping.

Market tipping refers to the situation where one company obtains high monopoly profits and market share, creating an anti-competitive environment for other firms.

The EU executive envisages that the tool would impose structural remedies to competition imbalances, but will not rule on infringements or establish fines.

While the Commission’s DG COMP is pitching the new tool as a general-purpose instrument, its application is likely to be most evident across the platform economy – digital markets harbouring many of the characteristics such as ‘extreme economies of scale and scope, strong network effects, zero pricing and data dependency’ that the tool aims to address.

The European Commission’s Vice-President for Digital, Margrethe Vestager, noted in May that the tool would feature prominently in the EU’s package of reforms which will attempt to regulate the online ecosystem.

Another branch of these reforms will be to establish potential ex-ante rules for gatekeeper platforms as part of the upcoming Digital Services Act package, a raft of new rules that will aim to regulate the online ecosystem.

In this regard, measures could be established that aim to ensure markets characterised by large platforms are able to remain fair, open and contestable to small players and market entrants.

Currently, both initiatives – the new competition tool and ex-ante rules for gatekeeper platforms – are soliciting public feedback as part of ongoing EU consultations.

Back in Washington this week, House Judiciary Committee Chairman Jerrold Nadler and Antitrust Subcommittee Chairman David Cicilline are pleased that the CEOs of leading global tech giants are willing to testify in the ongoing antitrust investigations.

“Since last June, the Subcommittee has been investigating the dominance of a small number of digital platforms and the adequacy of existing antitrust laws and enforcement,” a statement from the two Democrats read earlier this week.

“Given the central role these corporations play in the lives of the American people, it is critical that their CEOs are forthcoming. As we have said from the start, their testimony is essential for us to complete this investigation.”

[Edited by Zoran Radosavljevic]

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