Regulating Big Tech: From Competition Policy to Sector Regulation? (Updated October 2022 with the Final DMA)

38 Pages Posted: 18 Oct 2022

See all articles by Oliver Budzinski

Oliver Budzinski

Ilmenau University of Technology

Juliane Mendelsohn

Ilmenau University of Technology

Date Written: October 14, 2022

Abstract

The European Commission has proposed a new regulatory tool for the governance of digital markets. The Digital Markets Act (DMA) intents to limit the market behavior of socalled gatekeeper companies to ensure contestable and fair digital markets. We review the provisions of the DMA both from a legal and from an economic perspective. Notwithstanding a number of benefits, we identify several issues with the current proposal. When looking at the core provisions of the proposal from an economic perspective, several issues of contention arise: many of the provisions seem to be quite narrow in scope and it seems difficult to extrapolate more general rules from them; the economic harm of some of the provisions is both uncertain and in principle debatable; the alleged distinction between different types of obligations cannot be verified; and, in addition, Art. 5-7 DMA seem to contain three distinct regulatory instruments; last but not least, while the DMA seeks to control existing gatekeepers, the “tipping” of markets and the rise of further gatekeepers is not guaranteed by the proposed regulation, this in turn leads to a larger critical analysis of the gatekeeper as the DMA’s norm addressee. While the goals and nature of the DMA have gained in clarity throughout the legislative process, its scope remains somewhat obtuse. On the one hand it seems set on regulating gatekeepers as they exist today, on the other, also wants to bring about systemic change in the digital single market. How it expects to achieve the latter is not entirely clear. In this light and by critically looking at the nature of ex ante and ex post measures in broader competition policy, we conclude that a reform of the competition policy regime would better suit the overalls aims of reining in big tech in future.

Keywords: big tech, digital economy, digital ecosystems, GAFAM, competition policy, antitrust, Digital Markets Act (DMA), sector-specific regulation, law and economics

JEL Classification: K21, K23, K24, L40, L50, L81, L86

Suggested Citation

Budzinski, Oliver and Mendelsohn, Juliane, Regulating Big Tech: From Competition Policy to Sector Regulation? (Updated October 2022 with the Final DMA) (October 14, 2022). Available at SSRN: https://ssrn.com/abstract=4248116 or http://dx.doi.org/10.2139/ssrn.4248116

Oliver Budzinski (Contact Author)

Ilmenau University of Technology ( email )

Ilmenau, D-98684
Germany

HOME PAGE: http://www.tu-ilmenau.de/wth

Juliane Mendelsohn

Ilmenau University of Technology ( email )

Germany

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