EU Comission to Investigate Monopolies of Digital Platforms

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EU Comission to Investigate Monopolies of Digital Platforms

The EU Commission will finance studies on the market-domination of digital platforms. They’ll precede the Digital Services Act, and involve 600,000. SERN analyses this below.

The Commission has opened a call for contracting, recently. The goal is to investigate gatekeeping, or market-domination by digital platforms. This phenomenon is known to have network effects, in the EU market. Ideally, investigations should suggest tools to minimize this.

Digital markets are characterized by strong “winner takes all effects”. Nowadays, digital platforms are highly interconnected. Once an actor gains a key position, it can entrench itself. This allows him to be a private regulator, setting game rules. Needless to say, EU digital markets are critical for SMEs and several users. Also, their importance is expected to rise in the future. This makes it urgent for the Union to regulate them.

The investigation should address six areas of the online economy. The first is self-preferencing in online platforms. The second is the issue of data access. The entrenchment in digital identity services (regarding users), is the third. The fourth is service interoperability. Employment of data holdings, in diverse markets, is the fifth. The last is information asymmetries, resulting in high switching costs for users of certain platforms.

The investigation’s being commissioned in a specific context. This regards the upcoming Digital Services Act. The legislation will aim to level the online playing field, for EU businesses. It will be critical for ecommerce development, inside the single market.

The Digital Services Act will be a mark in EU digital development. Such was mentioned by the Commission’s Vice-President for Digital, Margrethe Vestager. Addressing the EU’s parliament, she also hinted at a new competition tool. This would prevent EU digital markets form tipping (i.e. being unfair).

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