Competition rules and globalisation to face off in 2020
2020 will likely revolve around the question whether competition rules should yield to globalisation and digitisation, with suggestions ranging from mere tweaks to competition rules to complementary regulation. Greater cooperation across data protection, consumer protection and competition law appears inevitable. Speedier solutions in more informal settings may become a reality, alongside more frequent use of behavioural remedies.
Additional tools to supplement existing EU competition rules may lead to stricter regulation of non-EU state-supported companies. It remains to be seen precisely how the regulatory landscape will evolve, but companies should brace themselves for upcoming changes.
Updating existing tools
The European Commission is reviewing its competition tools in the face of continuous globalisation and digitisation. The Commission’s market definition notice will be reviewed and adjusted according to the changing scope of geographical markets and the changing nature of product markets. The increasing ease of global trade may lead to wider geographical markets, while the increasing availability of free products requires product market definitions to be based on factors such as quality, rather than price.
The importance of data is likely to play a more prominent role in merger reviews and the potential negative impact of ‘killer acquisitions’ will need to be examined further [see our November 2019 Newsletter]. Furthermore, the potential lock-in effects of big digital companies offering multiple services to consumers requires additional scrutiny; this issue is also high on the ACM’s 2020-2021 agenda, which designates fair access to these “ecosystems of services” and online platforms as one of the ACM’s 2020 key priorities.
In addition, the Commission’s rules on vertical agreements and horizontal agreements will be adapted to the digital age by specifically addressing the Commission’s approach to issues including dual pricing, online sales, online market places, the use of algorithms and the dual role of online platforms.
Adding new tools
However, competition law alone may not suffice to deal with all the challenges ahead. Additional regulation to ensure fair trading practices by online platforms will soon become applicable. Greater cooperation between regulatory authorities may be on the way [see our March 2018 Newsletter], potentially alongside vigorous enforcement in other fields (such as data protection) and further legislation where there are, according to Deputy Director-General Cecilio Madero Villarejo, “clearly defined and recurring issues that lead to systemic market failure”.
Extra tools may be added to the existing EU competition law framework to prevent non-EU state-supported companies from disrupting the internal market’s level playing field. A white paper for an instrument on foreign subsidies is expected soon, while a recently published proposal suggests empowering the Commission to intervene if a ‘foreign’ company’s anti-competitive conduct is enabled through government support or excess profits from an unregulated dominant position in its own country.
Speedier solutions
Speedier solutions to keep up with fast-moving markets are also imminent [see our September 2019 Newsletter]. Reversing the burden of proof or lowering the required standard of proof in fast-moving markets is on the table; as is the more frequent use of interim measures to keep Big Tech in check. Imposing access requirements or restorative remedies may also soon be the order of the day. Furthermore, an ex ante intervention tool to pre-emptively deal with online gatekeepers’ potential anti-competitive conduct could mitigate the need for speed [see our November 2019 Newsletter].
The list of suggestions and proposals seems almost endless, and the precise way forward remains unclear. However, one thing is for sure: things are bound to change in 2020 – and companies had better brace themselves.
This article was published in the Competition Newsletter of January 2020. Other articles in this newsletter:
