Regulate tech giants and create European champions, says Dutch government

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EU and Competition Law

Companies beware: revised EU competition rules are on their way. After the Franco-German Manifesto calling for more political intervention in competition rules to better deal with intensified global competitive forces, the Dutch government is now pleading for politically independent enforcement of stricter EU competition rules.

Stronger, modernised competition rules will not only allow European champions to grow, they can also keep powerful global digital platforms in check. On the Dutch government's wish list are ex ante supervision, forced data sharing, transaction value-based merger thresholds and more guidance on online markets specificities. Even though the new European Commission will have the final say, companies should nonetheless prepare for a strengthened EU competition policy.

The Dutch government agrees with Franco-German suggestions to: (i) defend multilateralism and open markets, (ii) promote an ambitious EU trade policy, and (iii) improve the global level playing field. However, it also questions whether introducing a veto to politically 'unblock' blocked European Commission merger decisions is necessary for the cultivation of European champions capable of competing on the world stage. Instead, champions should be created through strong and politically independent enforcement of strict competition rules, within a strengthened single market. These stricter competition rules are particularly needed to deal with the challenges of the digital economy.

For this reason, the Dutch State Secretary for Economic Affairs and Climate Policy suggests the following additional tools for EU competition policy to keep up with online developments:

  • intervention by way of ex ante measures, forcing large platforms with gatekeeper roles to, (for instance) share data or stop favouring certain search results, even before abuse occurs
  • fill the online market gaps in the current guidelines, such as how to define multi-sided markets, how to assess the role of data in competition analyses, and how to deal with abuse of dominance based on data or privacy instead of price;
  • introduce a transaction value-based merger review threshold to enable competition authorities to review 'killer acquisitions': acquisitions by dominant firms of relatively small, innovative start-ups in order to avoid them growing into important rivals.

The Dutch government acknowledges it needs the support of the European Commission and the other Member States to realise these ambitions. Even though its appeal for support is unlikely to fall on deaf ears - the European Commission's special adviser's report has also suggested considerable changes [see our May 2019 Newsletter] -  it could still be some time before a revised EU competition policy materialises. The new European Commission will first need to take a stance on the future of the EU competition rules. Companies should thus prepare for a revised EU competition policy, but they should not hold their breath for any imminent changes.

This article was published in the Competition Law Newsletter of June 2019. Other articles in this newsletter:

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