The Draft Digital Markets Act: A Legal and Institutional Analysis

Abstract

This paper considers the proposal for a Digital Markets Act. The single most notable aspect of the draft legislation is that it would give the European Commission substantial leewway to restructure, in the name of fairness and contestability, ecosystems and business models in the digital arena. The European Commission would also enjoy the same leeway to identify the firms that would be subject to intervention.

The paper compares the approach proposed in the Draft DMA with that followed in competition law and the EU telecoms regime. It appears, first, that the legislative proposal dispenses from the need to engage in the sort of case-by-case, contex-specific evaluation that is characteristic of competition law regimes. Second, the Commission would not be subject to the legal and economic constraints that are common to competition law and the EU telecoms regime. Third, the burden of intervention is placed upon the firms, not the authority.

Several implications follow from this regulatory design. Because the European Commission would not be subject to the constraints that derive from decades of EU competition law enforcement, its relationship with stakeholders might change as a result. A second question is whether the Draft DMA would allow for judicial review to be meaningful.

Keywords: DMA; competition law; regulation; gatekeeper; digital; platforms

JEL Classification: K21, K23, L40, L51, L96, L97