Transatlantic Cooperation and Enforcement in Digital Markets
One of the main issues facing the enforcement of competition laws, and corresponding compliance efforts, in digital markets is the inherent global nature of the conduct of digital markets players. As the OECD noted in this respect, “Governments may need to enhance co-operation across national competent agencies to address competition issues that are increasingly transnational in scope or involve global firms.” Against this backdrop, the US, EU and UK competition agencies have recently issued joint statements to re-affirm their commitment to cooperate in this area. This blog post provides a short commentary and shows that… there is more in those statements than meets the eye.
The US-EU Joint Statement
Linked to the EU – US Trade and Tech Council, held on 7 December, the US Department of Justice, the Federal Trade Commission and European Commission launched the EU-US Joint Technology Competition Policy Dialogue (Joint Dialogue) to reaffirm their close cooperation in antitrust enforcement and policy issues arising in digital markets.
The Joint Dialogue will include high-level meetings as well as regular staff discussion. The fact that US and EU antitrust officials will now have an official place to meet regularly to talk shop, policy and exchange views may be expected to bleed into how they approach enforcement in digital markets. For example, both the Commission and the Federal Trade Commission are doubling down on how a digital market “gatekeeper” may use its own platform to favor some of its own services over those of rivals.
However, the approaches to tackling these issues may not necessarily be the same. For example, Europe is still aiming to adopt a new digital rulebook (the new Digital Markets Act and the Digital Services Act) by the end of the year to promote fairness and contestability through an ad hoc ex ante regime, which is separate from competition law, requiring designated “gatekeepers” not to engage in certain conduct (e.g. self-preferencing) and to engage in other (e.g. data mobility and interoperability). Something that the US is unlikely to do… at least within the same timeframe. At the same time, the US agencies have been more vocal than their EU counterparts in advocating for the break-up of large Big Tech platforms.
US–UK Joint Statement
In parallel to the Joint Dialogue, as part of the Competition Enforcers Summit in London that took place under auspices of the 2021 G7 Digital and Technology Track in connection with the UK’s G7 presidency, the US antitrust agencies also discussed cooperation with the UK’s Competition and Markets Authority. They underscored the similar challenges they face as enforcement agencies, highlighted their close relationship and affirmed their intention to strengthening collaboration and coordination with each other in a post-Brexit world.
However, the UK approach to tackling common issues in digital markets is somewhat unique. It is largely based on a report prepared by a group of experts (so-called the Furman Report) and founded on a new Digital Markets Unit and a new Digital Regulation Cooperation Forum, grouping together – in addition to the Competition and Markets Authority – the UK’s communications regulator (Ofcom), the data protection agency (ICO) and the financial conduct authority (FCA).
The Digital Markets Unit is empowered to develop codes of conduct for digital players with strategic market status (SMS), to pursue personal data mobility and systems with open standards where these will deliver greater competition and innovation. As the CEO of the Competition and Markets Authority, Andrea Coscelli, noted: “Whilst the UK regime proscribes similar conduct to the proposals in Brussels and Washington, the approaches taken to applying regulation do differ. The DMA [Digital Markets Act], and some of the [US] Congressional proposals, are more prescriptive and, in the case of the DMA, self-executing. The US proposals rely on an enforcement model to prohibit a wide range of conduct, and provides for an affirmative defense. In contrast, many of the EU’s DMA will always apply to all designated gatekeepers, with a narrowly drafted exception.” Instead, the UK regime’s obligations on SMS firms would only be adopted following an investigation which has to determine, on the facts of each individual case, that the pro-competitive intervention (e.g. requiring data mobility or interoperability) is “an effective and proportionate remedy to an adverse effect on competition”.
Moreover, the Digital Regulation Cooperation Forum does not intend to stop at Big Tech platforms but, through a “Joining up on future technologies” initiative, is also considering whether intervention is warranted in the following sectors of digital markets:
Cloud computing technology
Privacy enhancing technologies
Distributed ledger technologies
Artificial Intelligence technologies, including machine learning
‘Internet of Things’, including voice assistants and wearable technologies
Immersive technologies, including virtual and augmented reality technology
Enforcement and compliance efforts in digital markets are becoming ever more complex.
These US, EU and UK antitrust agencies’ statements have been adopted while recent court rulings, investigations and hearings, policy reports and studies on how to address competition as well as wider data issues in digital markets keep proliferating around the globe.