The EU Digital Markets Act: A Report from a Panel of Economic Experts

Cabral, L., Haucap, J., Parker, G., Petropoulos, G., Valletti, T., and Van Alstyne, M ., The EU Digital Markets Act, Publications Office of the European Union, Luxembourg, 2021,ISBN 978-92-76-29788-8, d oi:10.2760/139337, JRC122910.

Boston University Questrom School of Business Research Paper No. 3783436

NYU Stern School of Business Forthcoming

36 Pages Posted: 18 Feb 2021 Last revised: 27 Apr 2021

See all articles by Luis M. B. Cabral

Luis M. B. Cabral

New York University (NYU) - Leonard N. Stern School of Business - Department of Economics; Centre for Economic Policy Research (CEPR)

Justus Haucap

German Institute for Economic Research (DIW Berlin); Heinrich Heine University Dusseldorf - Department of Economics

Geoffrey Parker

Dartmouth College

Georgios Petropoulos

Massachusetts Institute of Technology (MIT); Bruegel; Stanford University

Tommaso M. Valletti

Imperial College Business School; Centre for Economic Policy Research (CEPR)

Marshall W. Van Alstyne

Boston University – Questrom School of Business; Massachusetts Institute of Technology (MIT) - Sloan School

Date Written: February 9, 2021

Abstract

Over the last years, several reports highlighted the market power of very large online platforms that are gatekeeping intermediaries between businesses and consumers, and the difficulty for classic competition policy tools to deal effectively with anti-competitive practices in these platforms. In response to this, the European Commission recently published a proposal for a Digital Markets Act (DMA) to complement existing competition policy tools by means of ex-ante obligations for platforms. This report presents an independent economic opinion on the DMA, from a high-level Panel of Economic Experts, established by the JRC and based on existing economic research and evidence. The Panel endorses the vision encapsulated in the DMA, including the designation of large gatekeeper platforms and a series of ex-ante obligations they should comply with. The Panel points out the challenge of striking a balance between the benefits from network effects of large platforms and the potential negative effects from anti-competitive behaviour and winner-takes-all market forces in online services. While some types of anti-competitive behaviour are well-known from classic competition cases, data-driven multi-sided platforms have found new ways of tying, bundling and self-preferencing that present new challenges. The report explores these behaviours in specific settings, including in online advertising and mobile ecosystems. It discusses ways to use valuable data gathered by platforms for pro-competitive purposes and the wider benefit of society in order to achieve a higher standard of fairness in the distribution of the social value generated by large platforms. Information asymmetry between platforms and regulators remains an issue in the effective implementation of the obligations.

Keywords: Digital Markets Act, Regulation, Competition Policy, Digital Platforms

JEL Classification: D20, D21, K21, L40, L41, L42, L43, L50, L51, L86, L88, M13, M21

Suggested Citation

Cabral, Luis M. B. and Haucap, Justus and Haucap, Justus and Parker, Geoffrey and Petropoulos, Georgios and Valletti, Tommaso M. and Van Alstyne, Marshall W., The EU Digital Markets Act: A Report from a Panel of Economic Experts (February 9, 2021). Cabral, L., Haucap, J., Parker, G., Petropoulos, G., Valletti, T., and Van Alstyne, M ., The EU Digital Markets Act, Publications Office of the European Union, Luxembourg, 2021,ISBN 978-92-76-29788-8, d oi:10.2760/139337, JRC122910., Boston University Questrom School of Business Research Paper No. 3783436, NYU Stern School of Business Forthcoming, Available at SSRN: https://ssrn.com/abstract=3783436

Luis M. B. Cabral

New York University (NYU) - Leonard N. Stern School of Business - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States
212-998-0858 (Phone)
212-998-4218 (Fax)

HOME PAGE: http://www.stern.nyu.edu/~lcabral

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Justus Haucap

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Heinrich Heine University Dusseldorf - Department of Economics ( email )

Duesseldorf
Germany

HOME PAGE: http://www.dice.uni-duesseldorf.de

Geoffrey Parker

Dartmouth College ( email )

Department of Sociology
Hanover, NH 03755
United States
603-646-9075 (Phone)

HOME PAGE: http://engineering.dartmouth.edu/people/faculty/geoffrey-parker

Georgios Petropoulos

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Bruegel ( email )

Rue de la Charité 33
B-1210 Brussels Belgium, 1210
Belgium
22274217 (Phone)
22274217 (Fax)

Stanford University ( email )

Stanford, CA 94305
United States

Tommaso M. Valletti

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Marshall W. Van Alstyne (Contact Author)

Boston University – Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
617-358-3571 (Phone)

HOME PAGE: http://questromapps.bu.edu/mgmt_new/Profiles/VanAlstyneMarshall.html

Massachusetts Institute of Technology (MIT) - Sloan School ( email )

Initiative on the Digital Economy
245 First St, Room E94-1521
Cambridge, MA 02142
United States
617-253-0768 (Phone)

HOME PAGE: http://web.mit.edu/marshall/www/home.html

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