The Antitrust Bulletin

The Digital Markets Act (DMA) in the European Union assumes that all large “core platform service” providers pose similar threats to competition and to fairness and thus imposes identical obligations on all of them. The alternative “New Competition Tool,” that would have allowed the European Commission (EC) to conduct fact-intensive investigations of markets to design bespoke remedies, has been largely abandoned. The approach adopted contradicts the basic principle that competition policy should be concerned with evidence of adverse effects. The proponents of the adopted form of the DMA argue that ex ante action is required to forestall irreversible harm to competition, but that same logic also implies assessing the risk of harm from excessive regulation—and the DMA contains no mechanism to do so. Given the different underlying economics of different kinds of platform services, including the way some support digital ecosystems involving many firms, a different approach is needed. The EC missed the opportunity to introduce a market investigation tool. The rigid and static framework of the DMA seems like the wrong solution, given the economics of digital markets.

The digitalization of economy, the proliferation of data collection, and the increased dependency of consumers on online services has brought about new ecosystems, new business models, and new, complex antitrust issues. Delineating the new remits of antitrust enforcement to tackle those issues is not an easy task. The present contribution discusses significant legislative and enforcement changes in Europe, both at Union and Member State level and identifies risks for the future of antitrust enforcement.

The Digital Business Ecosystem (DBE) model far surpasses other models and structures in its scope, scale, and complexity. DBEs feature unique economic, technological, business, and growth characteristics that increase their opacity to consumers, competition enforcers, and lawmakers. These include a range of market failures, the role of cloud computing in realizing the DBE value proposition, and growth through acquisition.The United States is making slow progress in addressing competition concerns in the digital sector. Legislative initiatives remain focused on the largest players, and there is little political appetite for a dedicated sector regulator to develop a system of non-discrimination “access” regulation. This article discusses the implications of the widening gap between the complexity and growth of DBEs, and policy responses to the market power problems they raise. The analysis recommends a more coherent approach centered on identifying policy tools—including antitrust, regulation, and privacy law—that are best suited to addressing the unique features of DBEs and that work in a complementary way.

Privacy and competition law pursue different goals that do not always align, but they can be harmonized under the right approach. Recent proposals in Congress, however, put privacy and competition values in direct conflict, likely at the expense of consumer privacy. Rather than diminishing consumer privacy and security through competition legislation, Congress should enact a comprehensive consumer privacy law that protects consumers while leveling the playing field for all competitors. This article addresses recent calls to regulate consumer privacy and the commercial use of data through competition law. First, we address the changing landscape of consumer privacy and calls for additional regulation. We then discuss recent proposals to use competition law to address issues stemming from widespread data collection and aggregation. Finally, we describe the collision course of antitrust and privacy in recent legislative proposals and offer an alternative path forward.

The year 2021 was the first remarkable year of Chinese anti-monopoly law enforcement in the digital economy. Against the macro backdrop of strengthening anti-monopoly and preventing the disorderly expansion of capital, China has closed high-profile cases and enacted relevant guiding documents, implying that competition in the digital economy is undergoing a revolution in China. However, with the strengthening anti-monopoly enforcement in the digital economy, China has also been confronted with new challenges. For example, how to make sure that the interconnectivity between platforms and data interoperability do not interfere with data security, personal privacy, and consumers’ legitimate rights and interests? How to balance the curbing of almost unconstrained digital ecosystems and the enhancement of economic efficiency? With the emergence of digital giants, profound changes are taking place in the competitive relationships between various market participants, while the advantages and disadvantages of capital growth have become increasingly prominent. We propose competition authorities worldwide to learn from and cooperate with each other to solve monopolistic problems in the digital economy, considering it is a global matter.

Compared with the size of China’s digital market, competition enforcement in China in this area is relatively underexplored. It had been almost an entirely blank space until the end of 2020. This article summarizes the enforcement actions that have been taken to date, from few distant cases in which former authorities tentatively approached competition issues in this area, to more recent landmark cases in which more sophisticated analysis is provided and hefty fines are imposed. This article traces the enforcement history, thereby explaining the reasons of some China-featured situations, for example, a large amount of existing gun-jumping cases. It also studies some comparable enforcement decisions with a common issue, for example, dominance abuse in the digital market and a controversial topic in China—“choose one from two.” Enforcement trends are also discussed to predict future development in this regard.

There is increasing global concern about the effectiveness of merger control in competition law. Globally, concerns about rising market concentration and in particular, the effect of consolidation by digital platform businesses, have prompted numerous inquiries and articles exploring whether competition laws are effective in addressing concerns about their anticompetitive impact in relation to mergers. Australia’s approach to merger control makes it an outlier in a number of ways. Its major approval procedure, informal clearance, is outside the scope of the Competition and Consumer Act 2010 (Cth). Formal decisions are generally heard in courts. Of note, under the current “likely substantial lessening of competition” test which became operative in 1993, the Australian Competition and Consumer Commission (ACCC) has not successfully proven in court that a merger would be likely to infringe the law. This article examines the methodology of Australian courts in applying this test, including the judicial approach to acceptance and assessment of economic and noneconomic evidence. It suggests approaches to enable consideration of the best evidence available. This analysis is in the context of amendments to the merger system recently proposed by the ACCC. We conclude that there are significant challenges in determining whether a merger is anticompetitive and that changes to the relevant methodology are necessary. This might be done by adopting the ACCC proposals or by a reconsideration of the merger factors and the approach to applying them.

Following an international trend, Brazil’s National Competition Authority (NCA), the Administrative Council for Economic Defense (CADE), has been devoting more attention to potential anticompetitive conducts in the digital economy. This article discusses a set of cases involving unilateral conducts in the digital economy, assessing CADE’s decision-making practice, enforcement challenges, and tools used. Building from CADE’s case law, we single out some relevant aspects of the Brazilian experience, including (1) the cautious approach taken by CADE when evaluating effects of unilateral conducts in final decisions, (2) the use of interim measures to intervene in early stages of investigations, and (3) the use of settlements to reach quick solutions with negotiated remedies. A brief conclusion discusses possible future trends given the experience discussed in the article.

This article looks at the competition (or lack thereof) in the U.S. and EU financial service markets and how innovative companies have decided to enter the market. Over the years, many start-ups have ventured into financial services; however, they have faced heavy regulations. These regulations have led these companies to using a “white label” business model. This model has wide competition law implications: some good (e.g., more innovation at different levels of financial services) and some bad (e.g., innovative companies being bought out). These start-ups do not provide the competition first hoped while competition authorities and regulators often lag behind the technology to act and preserve competition before it is too late. This article makes some recommendations how the U.S. and EU competition authorities can learn from each other’s mistakes.