The European Commission has repeatedly heard that large digital businesses may be blocking innovation by buying tech start-ups, competition commissioner Margrethe Vestager has said. Matt Richards in Brussels
Vestager highlighted concerns about the role that big technology companies may be playing in “blocking paths that deliver innovation to consumers”, in a speech opening the European Commission’s “Shaping competition policy in the era of digitisation” conference today.
The commissioner said that, when the authority put out the call for topics the conference should tackle, the same issues had come up “again and again and again” – including the potentially negative role played by tech giants.
The authority had heard that promising ideas from small innovators were at risk of simply disappearing, Vestager said. “Not because they’re not worth it, not because they couldn’t be successful with customers, but because bigger businesses buy them – in order to kill them.”
The commission wants to “balance things out” because businesses need to continue to innovate and to want to be in the digital marketplace, Vestager said. The commission must make sure that there is a “a real openness for these things to happen,” she added.
Alongside the control of big data, Vestager said, there were fears that these developments meant platforms were controlling the terms of access, which allowed them to “expand their power across the digital world”.
The big question is how to respond, Vestager said, as the commission at this stage does not know whether it should reinterpret the rules it already has or create new ones to tackle the new landscape.
Jean Tirole also discussed killer acquisitions in his keynote speech to the conference today.
The Nobel Prize-winning economist drew parallels to the pharmaceutical industry, where he said dominant companies acquired specific medical products that were in the pipeline, killing them off before they finished being developed.
Tirole called for the burden of competitive proof to be shifted onto dominant companies that sought to buy small rivals. He said the lack of data available to competition authorities about such deals made it difficult for them to enforce competition policy effectively.
Tommaso Valletti, chief economist of the commission’s Directorate-General for Competition, previously has suggested that shifting the burden of proof onto larger companies to prove the efficiencies of their deals could be one way of tackling the issue of killer acquisitions.
The “shaping competition policy in the era of digitisation” conference concluded today.