Europe’s online marketplaces should not be controlled by a handful of dominant gatekeeper platforms, the EU’s digital chief Margarethe Vestager has said, referring to her bid to reign in the market dominance of tech giants through the EU’s forthcoming new competition tool.
Opening the German EU presidency’s ‘competition days’ on Monday (September 7), Vestager also shed some light on the objectives of the upcoming Digital Services Act, which is on course to be unveiled before the close of the year.
“These new powers, they would go hand in hand with expansive regulation,” Vestager said, referring to ex-ante regulation set to feature in the new legislation, which should lay the ground rules for fairer and more balanced digital markets.
“Europe’s online marketplaces should be vibrant ecosystems, where startups have a real chance to blossom. They shouldn’t be closed shops, controlled by a handful of gatekeeper platforms,” she added.
New Competition Tool
Vestager has previously charted the Commission’s new competition tool as being necessary to reign in the power of the digital platforms in an environment where firms harbouring significant network effects have too much control over the markets that smaller businesses rely on.
The modernisation of EU competition rules to make them ‘fit for the digital age’ was a priority Vestager was tasked with by Commission President Ursula von der Leyen at the start of her mandate.
The tool itself will be designed to intervene in the scenario where certain markets become close to ‘tipping,’ meaning when one company obtains high monopoly profits and market share, creating an anti-competitive environment for other firms.
The Commission envisages that the tool would impose structural remedies to competition imbalances, but will not rule on infringements or establish fines.
Public consultation on the EU’s new competition tool is set to close on Tuesday (8 September) and Vestager said on Monday the feedback received so far is positive with regards to the new tool’s foreseen objectives.
“Most people find that it will be useful in digital markets, maybe also in markets that are digitalizing, because we foresee that the entire economy will be digital,” she noted.
Speaking alongside German Economy Minister Peter Altmaeir, the EU’s digital chief also highlighted her hope that the new tool would have a “deterrent effect” in order to ensure that gatekeeper platforms “play by the rulebook.”
More generally, the Commission is also banking on its new data strategy to help European firms become more competitive on the global stage.
In February, the EU executive published a paper outlining a series of initiatives aiming to liberalise the bloc’s industrial data ecosystem.
These included the creation of nine common EU data spaces across sectors including healthcare, agriculture and energy, as well as the establishment of a Data Act in 2021 that could “foster business-to-government data sharing for the public interest.”
As part of the framework, the Commission could also look at usage rights for co-generated data between private actors, which are currently laid down in private contracts, in addition to compulsory access to data under specific circumstances.
And according to Vestager, Europe’s growth in the industrial data space is of particular importance, in order to foster the development of small and medium-sized enterprises.
“Data pooling and data sharing will also become increasingly important to keep European businesses at the forefront of innovation, for example in areas like artificial intelligence,” she said.
“And when smaller rivals share information, they stand a better chance to challenge and to compete with market leaders.”
[Edited by Zoran Radosavljevic]