Taming Tech Giants with a Per-Se Rules Approach? The Digital Markets Act from the 'Rules vs. Standard' Perspective

Abstract

From the "rules vs. standard" approach (in law & economics) the regulatory approach of the DMA proposal of the EU Commission, which requires that all gatekeepers have to com-ply with the same set of obligations with regard to all core platform services, can be seen as a strict per-se rule regime enacted by the legislator, which tries to minimize investigations and assessments by the Commission for avoiding the problems of traditional competition law. It breaks in a radical way with the long-term evolution towards a standard-based rule of reason approach in competition law (with its focus on the effects on consumer welfare), which is widely seen as ineffective for digital markets. This article analyzes the DMA and its manifold problems from the perspective of the benefits and costs of using rules or standards in competition law (error costs analysis). It shows that the DMA runs into a number of difficult problems, partly through the per-se rules approach itself, partly through the incomplete specification of many obligations, the lack of an analysis of the aggregate effects of all obligations, and the lack of a clear assessment approach that can be used for investigations in the DMA. The "rules vs. standard" approach can also be used for discussing the proposals of introducing more flexibility within the DMA for achieving a better balancing between fast enforcement and the advantages of a more differentiated approach. The article concludes with some recommendations, e.g. also to be cautious about introducing too much flexibility, because this might lead back to the well known problems of the application of traditional competition law in digital markets.

Keywords: per-se rules, Digital Markets Act, competition law, error costs

JEL Classification: K21, K24, L41, L43, L86