The European Commission’s ‘market investigation tool’, expected to feature as part of the upcoming Digital Markets Act, will be scaled-down and its powers limited, after the EU executive’s internal review panel raised concerns over its operation, two sources close to the matter have told EURACTIV.
The Commission’s regulatory scrutiny board, an independent body that advises the executive on its legislative texts, is believed to have recently aired its opposition, for a second time, on the details of the market investigation tool in the Digital Markets Act, which the Commission is set to present on 9 December.
The EU executive had originally intended the tool to investigate markets close to failure, particularly in the digital economy, and impose case-by-case remedies as necessary.
However, EURACTIV has learnt that following criticism from the regulatory scrutiny board, the power of the tool is likely to be restricted.
The apparatus is to be stripped of powers that would have allowed it to impose remedies for uncovering market failures, because of concerns over the ‘legal basis’ of the tool, in light of powers that EU competition regulators already have.
In this vein, investigations conducted with the market tool are only likely to lead to new services being added to the scope of ex-ante rules, new companies being designated as gatekeepers, and certain new practices being regulated.
Attempts by the Commission over recent years to intervene in situations where it has identified an anticompetitive practice has led to lengthy investigations, like its decade-long antitrust probe into Google for the exclusive pre-installation of certain Alphabet-owned apps.
One of the main objectives of the new investigation tool is to allow the Commission to unearth such abuses before they are allowed to have a detrimental impact on the market.
In this vein, EURACTIV has been informed that the Commission is hoping that the tool will lead to significantly reduced investigations in terms of time frames, believing market investigations to take between 18 months and two years.
Blacklist, Greylist, Whitelist
The executive is also set to unveil a list of ex-ante prohibited practices by digital gatekeepers as part of the Digital Markets Act.
A leak list of prohibited practices by certain gatekeeper platforms earlier this year revealed that big tech firms may face restrictions on their business activities, including the exclusive use of data and self-preferencing activities.
However, under the blacklist draft as it currently stands, no ‘general ban’ on self-preferencing activities is likely to be proposed, but the Commission is understood to want to put forward around four specific types of self-preferencing activity that it wants to outlaw, based on knowledge garnered from years of antitrust enforcement.
Included in the executive’s plans is also a potential ‘greylist’ of activities that are deemed ‘unfair’ and may therefore require greater oversight by a competent authority. In this list of practices, the Commission is likely to present a framework whereby gatekeepers are required to obtain permission for these activities.
A ‘whitelist’ of affirmative obligations, meanwhile, may contain greater interoperability responsibilities, and provide greater access to certain types of data.
Scope of gatekeeper platforms
Moreover, a separate source has revealed that the scope of so-called ‘gatekeeper platforms’ will be restricted to a ‘small number’ of firms, most of which are American, EURACTIV have been told.
The threshold for determining gatekeepers will be predominantly ‘quantitative,’ and the evaluation will be based on the platform’s scale of impact on the EU’s single market and its capacity to cement a position of unchallenged power.
However, firms that do not meet the criteria for gatekeeper platforms can still be assessed for this designation under the market investigation tool.
[Edited by Zoran Radosavljevic]