Ensuring digital competition
A Dutch proposal to futureproof competition policy in an ever more digitizing world
18 July 2019
Over the past decade, the digital economy has rapidly evolved and digital platforms have become important parts of our daily lives. This digitalization led to an undeniable increase of perceived power of giant online platforms, such as Alphabet (Google), Amazon and Facebook. In response, concerns on whether that power can still be reined in have mounted too.
The Dutch government, through its current State Secretary of Economic Affairs, Mona Keijzer (the Secretary), proposes three measures aimed at supplementing the existing enforcement tool kit with new tools to tackle perceived concerns particularly around online platforms.
Before informing the Parliament of its intentions by letter of 17 May 2019, the Secretary ran a public consultation process on the basis of a discussion paper which explored to what extent online platforms raise antitrust concerns and whether the existing enforcement toolbox is adequately stocked to address potential concerns. As part of that process, the Secretary spoke to a seemingly wide range of stakeholders, including the Dutch Authority for Consumers and Markets (the national antitrust watchdog, the ACM) and the European Commission.
All of that resulted in the following three proposed measures:
- increasing the antitrust authority's powers to intervene and regulate access to online platforms ex ante, where that online platform can be considered a so-called 'gate keeper';
- updating and amending antitrust guidelines to reflect the particular challenges and application of antitrust rules in a digitalized world, specifically addressing, for example, the impact of multi-sided markets, data and privacy; and
- amending the merger notification thresholds by introducing an alternative threshold based on transaction value, such that transactions that currently do not meet the applicable turnover thresholds but in fact may potentially give rise to concerns, can be captured and reviewed by the antitrust authority.
Importantly, the Secretary does not propose to pursue the implementation of these measures at a national level. Instead, the Secretary commits to advocate and promote these at a European level such that these measures are more effectively implemented across the European Union as online platforms tend to not restrict themselves to national boundaries. Clearly, it remains to be seen whether the Secretary will be successful in promoting its proposals in Brussels and, if not, whether the Secretary would then consider following through more concretely within the ambit of its own powers in the national context. Although seemingly a somewhat 'soft' compromise between ambition, public and political pressure and prudence, with this approach the Secretary currently still resists calls by members of parliament to change Dutch laws in this respect.
Time will tell whether the enforcement of the current (or amended) antitrust rules by the ACM will follow the example of the German Bundeskartellamt in its controversial Facebook-case and the European Commission's persistent scrutiny of Google and the other FAANG's.
It may have taken a bit of time, but something is stirring within the ACM. A dedicated digital competition team of experts has been set up within the ACM. In an attempt to increase its knowledge and expertise, the ACM has conducted and finalized market studies around online video streaming platforms, the value of data in the competition process, new revenue models in media, (online) platforms for legal services, the use of algorithms and mobile app stores.
These initiatives of the ACM confirm their determination to address potential antitrust law concerns in a rapidly changing digital economy. On 11 April 2019, the ACM announced that it is formally investigating potential abuse of a dominant position by Apple in relation to its App Store. Apple will be scrutinized in this respect on many fronts, but the development of the ACM's investigation will be closely monitored.