On 28 March 2018, the European Commission announced it is setting up a working group of experts on the challenges of the digital world for competition law. The purpose of the working group is to advise Commissioner Vestager on changes in the digital world that will affect markets and consumers, as well as on the impact of those changes on EU competition policy.
What will the expert group focus on?
Not much is known about the expert group at this point or the topics on which they will focus. The experts’ previous experience could however reveal some information in that regard:
- Heike Schweitzer is Professor of Law at the Humboldt University of Berlin. She has been working in the academic sector her entire career and does not seem to have any business affiliations. In her research, she has focussed predominantly on competition law and on technology, media and telecommunications sector-specific regulation (with a particular focus on net neutrality and online platforms).
- Jacques Crémer is Professor of Economics at the Toulouse School of Economics. His research focusses on the economics of organisation, the economics of the Internet and software industries, as well as contract theory. He studies the application of these fields to two-sided platforms, industries with network effects, and the Internet in general. In February 2016, Professor Crémer was appointed to the Conseil national du numérique (French Digital Council).
In the past, Professor Crémer has testified before the Commission in relation to the merger between AOL and Time Warner, and has provided consultancy services to several TMT companies, including Microsoft, Google, Intel and Time Warner.
- Yves-Alexandre de Montjoye is Assistant Professor of Data Science at Imperial College London. He focusses on the privacy aspect of metadata, including mobile phone, credit card, or browsing metadata. During his time at MIT, he found that just four fairly vague pieces of information are enough to identify 90% of the people in a data set covering three months of credit-card transactions by 1.1 million users.
In addition to his academic position, he is an adviser to the board of Privitar, an enterprise software company headquartered in London, engaged in developing and adopting privacy engineering technology. He is also one of the persons behind openPDS/SafeAnswers, an online platform which allows users to collect, store, and give access to their data all while protecting their privacy. The platform is supported by broadband and telecommunication providers, Telecom Italia and Telefónica.
De Montjoye has indicated that he personally does not oppose governmental or commercial use of data sets; he however believes, first, in giving ownership and management of those data sets to citizens and, second, in making data sets more secure.
In the past, Professor de Montjoye has worked for the Boston Consulting Group and acted as an expert for the Bill and Melinda Gates Foundation and the United Nations.
What are the next steps?
At this stage, the Commission has identified only two concrete next steps: (i) on 17 January 2019, the Commission will organise a conference on the challenges for competition law posed by the digital world ; and (ii) the expert group is to draft a report by the end of March 2019.
We do however expect that the outcome of the expert group will have an influence on several of the Commission’s work streams:
- Formulating new legislative proposals – We see that the Commission is actively looking at regulating all things digital, with recent examples including the recently adopted Geo-blocking Regulation. The Commission is also actively looking at regulating online platforms and is drafting several proposals in that respect. The expert group is likely further to inform the Commission’s regulatory efforts in that regard.
Commentators suggested that future proposals may also include amending merger control thresholds to allow the Commission to take into account future potential of start-ups when assessing take-overs by established parties. According to critics, the current, static turnover thresholds, which only take into account historic data, are not appropriate to catch concentrations in fast-moving and disruptive markets.
In addition, the experts’ report is likely to affect the renewal of the Vertical Block Exemption Regulation, the current version of which expires in 2022. Although the Commission has indicated after the publication of its final report on the e-commerce sector inquiry in May 2017 that it would not push for a change of the Block Exemption Regulation prior to the expiry date, it is not unlikely that the Commission is already in the process of assessing whether specific language should be included in the next version to adapt the regulatory framework to the realities of the digital age.
- Adapting the existing competition law framework – Most commentators seem to agree that the current competition law framework is generally speaking sufficient to tackle the new challenges for the time being.
Certain assessment tools may however require updating. In a report of April 2018, OECD experts opined that current tools are not always appropriate to assess the economic realities of multi-sided (online) markets. A better understanding of how those markets operate may help the Commission to develop better tests to assess the competitive impact of behaviour or transactions. The expert group is likely further to inform the Commission’s developing understanding of the digital sector in that regard.
This initiative could lead to important changes in the application of EU competition law to the digital world, and could thus obviously have a profound impact on many companies.