Competition in EU Digital Markets

Abstract: The features of digital markets constitute entry barriers and facilitate large platforms to adopt strategic behavior. Large platforms benefit from these features, making it hard for new market players to enter their markets or compete. Besides, large platforms can employ strategies to foreclose competition based on the characteristics of digital markets, leading to large platforms holding dominance positions or the abuse of dominance as the competition issue in EU digital markets. Against this background, methodological and substantive gaps exist while applying Art.102 TFEU. Establishing dominance is difficult under the current legal framework. The ongoing tools are not sufficient to measure market power because of the unique features of digital markets. Even if the European Commission can establish a dominant position on the undertaking, Art.102 TFEU does not sanction the firm without specific conduct. Besides, despite Art. 102 TFEU can capture strategies by large platforms as abusive conduct; it intervenes too late in EU digital markets because it operates ex post. Introducing an ex ante regulation such as Digital Markets Act could be helpful in governing specific conduct by large platforms and reduce the negative effects of the features in EU digital markets. The proposed Digital Markets Act imposes ex ante obligations on the anticompetitive behavior of large platforms. It can substantively complement the competition law by its design of gatekeepers, the obligations of gatekeepers, and the European Commission’s power of oversight or enforcement. However, the proposed Digital Markets Act aims to ensure contestable and fair markets in the digital sector instead of providing competition that is not distorted in the internal market. This objective of the proposed Digital Markets Act is unclear within EU law. If legislators can introduce better guidance based on principles to interpret how to reach its legal interests, it may help the proper enforcement of imposing the obligations.