The Dutch competition authority wants new tools for pro-active competition law enforcement in digital markets
On 6 August 2019, the Dutch Authority for Consumers & Markets (ACM) published a short paper in which it endorses the Dutch government’s call for additional enforcement instruments in online markets of 17 May 2019.
The ACM wants additional enforcement instruments
In its paper, the ACM argues that additional enforcement instruments are required in order to be able to act timely and effectively vis-à-vis digital platforms, even before they engage in anti-competitive behaviour (in particular the abuse of a dominant position). The ACM believes that this could be justified in markets that are characterised by winner-takes-most dynamics, are driven by strong network effects, that have high barriers to entry due to data collection and consumer lock-in. This could occur in particular where a platform establishes its own ‘ecosystem’. The ACM believes that in case a market has such characteristics, it shouldn’t wait for a company to abuse its dominant position and to retrospectively punish it for such illegal behaviour.
The ACM advocates that such ex ante measures would not in themselves involve the imposition of sanctions (such as fines), but of measures to correct certain undesirable situations. However, the ACM does state that it should be possible to impose fines in case dominant companies that are subject to such instruments do not comply with the measures imposed on them: ‘Obviously, an effective punitive mechanism should be in place if companies do not abide with the imposed remedies’. The ACM believes that such tools should be available at both the EU and national level. Therefore, their introduction should be taken up in an EU context: ‘Obviously, the [European] Commission is best placed to impose remedies on EU-wide dominant companies controlling a bottleneck so as not to impair the single market. However, given the heterogeneous nature of both platforms and markets, enforcement at the national level may be in line with subsidiarity principles. Some companies might, after all, be dominant only in one member state.’.
Furthermore, measures imposed on the basis of these new tools should be proportionate in the sense that always the least burdensome measure is imposed on a company. In addition, according to the ACM, a remedy imposed on the bases of these new instruments should always be tailor-made.
The ACM states: ‘We envisage a tool that allows competition authorities to impose proportionate remedies upon dominant companies aimed at preventing competition problems, rather than relying on after-the-fact enforcement.’. Examples of the types of behavioural remedies that the ACM envisages are ‘platform access, data portability, data sharing and non-discriminatory ranking’.
The ACM had already hinted at the need for additional enforcement instruments in its April 2019 market study into mobile app stores: ‘Further investigation might be done by exploring options for ex ante regulation, for example by additional regulation, similar to the European Open Internet Regulation’.
Wider perspective: no consensus between European authorities
The views of the ACM and the Dutch government therefore appear to be aligned. However, this of course does not mean that there is a consensus between leading European authorities that new enforcement tools are indeed necessary.
In the report Competition Law for the Digital Era, special rapporteurs to the European Commission write that the current toolbox should be sufficient to deal with the challenges of the digital economy: ‘We are convinced that the basic framework of competition law, as embedded in Articles 101 and 102 of the TFEU, continues to provide a sound and sufficiently flexible basis for protecting competition in the digital era.’ The European Commission itself has yet to determine a position on this subject. The Belgian Competition Authority too seems to believe that its present toolkit is sufficiently stacked. At various conferences last year, the presidents of the British and German competition authorities however appeared to side with the ACM in its demand for new enforcement competencies.
Meanwhile, the French competition authority (Autorité) takes pride in its track record in imposing interim measures in order to tackle the enforcement gap perceived by other authorities. In the context of its Google Ads decision from 2019, it imposed such interim measures on Google concerning the objective, transparent and non-discriminatory application of the Google Ads rules. The Autorité claims that since 2009 it has ruled on 44 requests for interim measures and has granted interim measures in 8 cases: ‘France stands out by the existence of this procedure, which it does not hesitate to use when it considers that the conditions are met.’ The French competition authority therefore welcomed the adoption of the ECN+ Directive (1/2019). Once implemented into the EU member states’ national legislation (ultimately) December 2021, it provides competition authorities with the possibility to impose interim relief ‘even in the absence of a complaint by a company’. According to the ACM, however, the additional powers it will be given pursuant to the ECN+ Directive will not be sufficient because these still require a prima facie finding of a competition law infringement.
Consequently, as a consensus on the necessity of additional enforcement tools seems to be lacking among the various leading European competition authorities, it appears uncertain whether the enforcement tools that the ACM desires will actually be introduced in the relatively short term. Only time will tell, but it is highly interesting to see how these discussions will evolve.
If you have any questions regarding the status of the imposition of additional enforcement instruments in Europe, please contact a member of the Loyens & Loeff digital competition team. An overview of the opinions of different competition authorities in Europe on the need for additional enforcement tools will be included in the book ‘Digital Competition Law in Europe – A Concise Guide’ by Marc Wiggers, Robin Struijlaart and Joost Dibbits that will be published by Kluwer International in September 2019.