Improving Institutional Design to Better Supervise Digital Platforms

66 Pages Posted: 28 Jan 2022

See all articles by Alexandre de Streel

Alexandre de Streel

University of Namur; Centre on Regulation in Europe (CERRE)

Giorgio Monti

Tilburg Law and Economics Center (TILEC)

Date Written: January 17, 2022

Abstract

The European Union is increasing the number of laws which apply to the providers of digital services, in particular to digital platforms, and each of them are based on a specific oversight and enforcement framework. As many of those new laws overlap, it is key for the effectiveness of oversight and enforcement that those frameworks are coherent with each other and that the authorities in charge of the different EU laws cooperate. The aim of this study is to take stock of existing institutional models of what we called ‘EU platform laws’, evaluate each model by studying its effectiveness and consistency, and recommend improvements to the overall system to ensure more enforcement coherence and effectiveness.
Based on our analysis, we make the following recommendations to improve the coherence and the effectiveness of the enforcement of the ever-increasing stable of EU platforms laws. First, regarding the characteristics of good regulatory authorities, several key requirements related to independence, accountability, transparency as well as sufficient resources, power to collect and exchange information, and to sanction should be ensured.
Second, regarding the cooperation between regulators, the EU legal framework should maximise the potential benefits of cooperation, minimise the costs, and ensure than the former is higher than the latter. We think that at this stage there is enough experience for authorities and legislators to generalise flexible and pragmatic frameworks to organise authorities’ cooperation. This is useful as it creates a structure so that the authorities do not have to invent a procedure each time, hence should reduce the costs of cooperation. It is also important that those frameworks respect the fundamental rights of the parties under investigation. These cooperation frameworks should continue to be developed for cross-country coordination, but more importantly they should now be seriously considered for cross-regime coordination. To be pragmatic, this second form of cooperation may have to be first developed at the national level where it is probably easier to implement. Then, it can be expanded more systematically at the EU level, in particular with more interactions among the several EU networks involved in platforms regulation and with the establishment of joint committees as seen in financial supervision.
Third, there are some advantages in the centralisation of some enforcement tasks at the European Commission with regard to the largest digital platforms which offer cross-border services, as proposed by the Digital Markets Act and the Digital Services Act. In the longer term, one might consider the case for an independent Platform Authority separate to the Commission, responsible for the enforcement of platform regulation against the largest cross-border digital platforms. Were this to be pursued, however, it would have to be subject to the same governance principles as should apply to national authorities: independence (politically and of industry), adequate funding, robust information gathering/sharing and enforcement powers. A centralisation model at the European Commission or a new European Platform Authority would also require the involvement and a close cooperation with national independent authorities which have several comparative advantages to an EU body. The lessons from Banking Union reveal the usefulness of this connection. The degree of power sharing between the EU and national authorities can vary depending on which authority has a comparative advantage in addressing each task.

Keywords: Regulation, Digital platforms, European Union, Internet, Institutional design

JEL Classification: F23, F55, H70, K23

Suggested Citation

de Streel, Alexandre and Monti, Giorgio, Improving Institutional Design to Better Supervise Digital Platforms (January 17, 2022). Available at SSRN: https://ssrn.com/abstract=4015703 or http://dx.doi.org/10.2139/ssrn.4015703

Alexandre De Streel (Contact Author)

University of Namur ( email )

8 rempart de la vierge
Namur, 5000
Belgium

Centre on Regulation in Europe (CERRE) ( email )

Av Louise 475/10
Brussels, 1050
Belgium

Giorgio Monti

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

HOME PAGE: http://www.tilburguniversity.edu/staff/g-monti

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