Taming Tech Giants

In 2019, several expert reports ¹ warned that key digital platform markets are insufficiently competitive and dominated globally by one or two of the same five large digital companies: Google, Amazon, Facebook, ² Apple, and Microsoft (GAFAM). Jurisdictions around the world have since been grappling with how best to protect and stimulate competition in these markets, reigniting longstanding debates about core concepts of antitrust law such as the consumer welfare standard, the relevance of market concentration, error costs, and standards of proof. Several options are on the table: relying on traditional antitrust law, updating the existing antitrust rules to make them fit for the digital economy, regulating dominant platforms, or a combination of the above.

Unlike their U.S. counterparts, the European Commission and the national competition agencies of the EU Member States have actively enforced their abuse of dominance and merger rules against GAFAM for the past few years. Between 2017 and 2019, the Commission issued no fewer than three infringement decisions against Google alone, fining it in excess of €5bn. ³ Google brought actions for annulment against all three decisions. In Dec. 2021, the General Court of the European Union delivered its long-awaited judgment in the first of these cases, Google (shopping). ⁴ The court confirmed that self-preferencing in search results can constitute a form of abusive exclusionary conduct and upheld the decision, handing the Commission a major political victory.

Nonetheless, there is broad agreement even in Europe that antitrust law alone is insufficient to rein in the market power of dominant digital platforms, because its enforcement, which requires competition agencies to prove the investigated conduct’s likely effects on competition and consumer welfare, is too time-consuming, too expensive, and too limited in scope to protect competition effectively in fast-moving platform markets prone to tipping. The Google (shopping) saga illustrates this point perfectly. It took the European Commission six and a half years to investigate Google’s practice of favoring its own comparison shopping service over competing services by positioning and displaying search results from its own service in a more eye-catching manner. This conduct occurred as early as 2008. The Commission formally opened proceedings in 2010. It established the infringement in 2017. Google brought an action for annulment against the decision, which the General Court dismissed in Dec. 2021. In Jan. 2022, Google appealed. ⁵ This appeal can be expected to add at least another year and half to the process. By the time the final word is spoken, sixteen years will have passed since Google carried out the conduct in question.

While lawmakers in the United States are still in the early stages of debating a suite of bills aimed at restraining the power of the country’s biggest tech companies, ⁶ in Europe, the die is cast. The European Union is opting for a combination of antitrust enforcement and ex-ante regulation, as is the United Kingdom. The European Union’s Digital Markets Act, ⁷ which is expected to be finalized in the first half of 2022 and enter into force in 2023, is meant to address the length of proceedings by establishing a set of general per se conduct rules that will be binding ex ante on designated gatekeeper platforms. ⁸ The United Kingdom, which is now forging its own way following Brexit, is envisaging a similar system of per se conduct rules applicable to designated platforms with strategic market status, albeit individually tailored to each platform’s business model. ⁹ Significantly, both systems are supposed to complement and not replace their respective antitrust laws, which will continue to apply to the conduct of designated platforms. Whether the enforcement agencies will have any meaningful incentive to rely on the more cumbersome antitrust rules is another matter. Germany effectively beat the other two jurisdictions to the post, and finalized its new hybrid antitrust and regularly regime for powerful platforms in Jan. 2021. ¹⁰ First investigations against Facebook, Google, Apple, and Amazon are already underway. ¹¹

This symposium explores a few of the key challenges that enforcement agencies and legislators currently face in their attempts to protect competition by means of antitrust law and regulation. The first set of papers examine European, U.S., and Chinese attempts to tackle old and novel problems in the digital platform economy by means of traditional antitrust law. In light of the European Court of Justice’s recent ruling in Google (shopping), the symposium opens with a contribution on self-preferencing by dominant digital platforms. Patrice Bougette, Oliver Budzinski, and Frédéric Marty propose an economic analysis of self-preferencing practices and develop different options for remedies. This contribution is followed by my own paper on merger control in the digital economy, which analyzes how the EU and U.S. antitrust authorities deal with dominant platforms’ acquisitions of smaller tech companies in complementary markets. It shows that conglomerate theories of harm have recently made a significant comeback in the European Commission’s enforcement practice. Sandra Marco Colino discusses the first year of China’s “Big Tech crackdown,” focusing on enforcement, policy-making, and recent reforms. The following two papers engage with the contentious issue of whether non-economic forms of harm could and should be protected by means of antitrust law. Wolfgang Kerber discusses the relationship between antitrust and data protection law, while Viktoria Robertson examines whether antitrust law has a role to play in protecting democratic processes against Big Tech’s ability to steer political processes. The symposium concludes with two papers on the forthcoming EU and U.K. regulatory regimes. Elias Deutscher reflects on how current legislative initiatives to regulate dominant platforms in the European Union, the Unites States, the United Kingdom, and Germany are challenging established fundamentals of antitrust law. Niamh Dunne’s contribution provides an in-depth analysis of the United Kingdom’s new Digital Markets Unit.

We hope that these papers will make a useful contribution to the ongoing and challenging discussions on how best to tame the market power of digital tech giants while not unduly curtailing their ability to innovate and deliver high-quality services for consumers.