Worldwide jurisdictions and particularly the EU and the US should formulate “common visions” on how best to regulate competition in the platform economy, the European Commission’s digital chief Margrethe Vestager has said.
A statement from Vestager obtained by EURACTIV, which was submitted to the US subcommittee on antitrust ahead of a hearing with Big Tech giants on Wednesday (29 July), highlights how the European Commission would welcome greater alignment between the US and the EU in platform competition policy.
“If we can formulate appropriate policy responses around the world on the basis of shared experiences and knowledge and if possible, common visions, I consider that that can only be beneficial, both for citizens and businesses,” Vestager wrote, adding however that “every jurisdiction has its own specific market context, as well as its own legal and policy framework and traditions.”
On Wednesday, members of the US congress called into question the profit-making motives of global tech giants including Facebook, Google, Apple and Amazon, as CEOs of the ‘Big Four’ firms fielded a swathe of questions on anti-competitive practices, content moderation, and the mass-harvesting of user data.
Ahead of the meeting, EURACTIV was informed that the EU executive would be “closely following” developments stateside, and that the ongoing probe by the House Judiciary Antitrust Subcommittee would “contribute to our own reflections on how to tackle the challenges for competition enforcement in digital markets in an effective and timely manner.”
Vestager’s submission to the US subcommittee on antitrust draws attention to current concerns that the Commission has in terms of platform competition policy, including the dual role that platforms play in their markets.
This includes how “a company operates a platform upstream, and at the same time competes with others who operate on the platform downstream,” and how “the concentration of big data in the hands of a few digital platforms may act as a strong barrier to entry for newcomers.”
Options for ex-ante regulation
In terms of policy solutions, Vestager told members of the US congress that certain remedies are being mulled over by the executive, including continued competition law enforcement, ex-ante regulation of digital platforms, and a possible new competition tool.
As for potential ex-ante regulation of digital gatekeeper platforms, Vestager shed some light on a series of options, including one possible rule that “prohibits platforms from displaying their own downstream services more prominently than those of rivals.”
On regulation of the use of data, Vestager suggests establishing a ‘data silo’ rule, “where a conglomerate platform is prohibited from using specific data sets for certain business purposes in order to prevent it leveraging from one market to another.”
New competition tool
Earlier this year, the Commission announced it 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.
[Edited by Zoran Radosavljevic]