Vestager gives statement to Congress’ big tech hearings

Timothy CowenPartner, Preiskel & Co LLP

Congress’ hearings with the leaders of tech giants such as Apple, Facebook, and Google have received a lot of coverage. One particular area of interest lies in Margrethe Vestager’s statement before Congress.

The statement is made on behalf of Vestager in her capability as both Commissioner for Competition and Executive Vice-President of the Commission for a Europe fit for the Digital Age.  It summarises the difficulties posed by the digital economy, and the Commission’s focus in tackling them in the coming years.

In particular, the statement focuses on two key issues faced. First, the dual role of some digital platforms as gatekeepers at upstream levels of the market, but also competitors in downstream levels, and second, the role and importance of data, and the problems inherent therein.

Vestager laid out how the Commission plans to tackle these issues in three different ways:

(i) Continued vigorous enforcement of competition law;

(ii) Potentially imposing ex ante regulation on digital platforms; and

(iii) A possible new competition tool.

The first relates to continuing to enforce existing treaty provisions in respect of competition (articles 101 and 102 of the Treaty for the Functioning of the European Union). Enforcement actions can lead to significant being imposed on companies found to be non-compliant; in recent years the Commission has issued record fines to Google in respect of its conduct in respect of (i) Google Shopping; (ii) AdSense; and (iii) Android. However, there is some debate as to how effective this is in digital markets where the speed of change is such that a company may have profited hugely from breach, such as by becoming a market leader or monopoly platform and leaving the market irrevocably altered, long before an enforcement action is completed. The Commission also has open probes into Amazon and Apple’s business practices.

The second relates to a potential new regulatory regime which will aim to address “gatekeeper” digital platforms, where the dominant platform’s position is likely to be uncontestable by new entrants in an unregulated market. The Commission’s proposals in this area are subject to an ongoing public consultation, with a deadline for responses of 8 September 2020.

The third related to the Commission’s proposals for a new legal tool to address problems in digital markets which are not adequately addressed by articles 101 and 102. These proposals are also the subject of an open public consultation. The proposals are for a tool targeted at markets which are likely to “tip”, leaving conventional competition law tools too slow to address the impact of particular conduct on market dynamics.

The statement is a useful summary of the Commission’s policy goals over the next few years, and can be read here.

Please contact Tim Cowen should you have any questions

Contributing Advisors

Stephen HornsbyPartner, Preiskel & Co LLP