The analysis presented in this article suggests that the Digital Markets Act (DMA) would be a game-changer for the digital economy. From a legal perspective, the DMA should be regarded as a sector-specific, ‘ex ante’ regulation, i.e., a ‘lex specialis’ in relation to the general EU competition law, which relies on ‘ex post’ enforcement. The DMA restricts self-interested behaviour by ‘big tech’ and grants smaller competitors affirmative competitive rights, even where there is no anticompetitive behaviour by big tech under general EU competition law. By its terms, the DMA is aimed at ensuring ‘contestable and fair digital markets’, irrespective of consumer welfare. To achieve this objective, it will impose generic obligations on big tech that resemble remedies previously employed by the Commission in specific antitrust enforcement measures or that address antitrust complaints that the Commission is currently investigating.
Unlike conventional EU competition law, despite the DMA’s stated purpose, its main effect is not protection of European internet users (although they may benefit indirectly), but the protection of smaller European competitors against US ‘big tech’. These smaller competitors would no longer need to resort to the current system of ex post enforcement against abuse of monopoly power, which is believed to be insufficiently equipped to deal with digital monopoly power. Antitrust proceedings take a long time (five years or more is no exception), and in the meantime the competitive harm can increase. In many cases, the DMAwould make reliance on this slow, ex post enforcement program unnecessary. Instead, it would enable ‘ex ante’ enforcement actions to ensure competitive markets under the threat of very large fines.
Due to its far-reaching terms, the DMA would likely require changes to the business models of big tech. The DMA restates Adam Smith’s famous quip ‘[i]t is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest’. For the digital economy, the saying would be rewritten as: ‘It is not from the regard for their own interest of the gatekeepers that we expect our dinner, but from their benevolence’. Mandatory ‘big tech benevolence’ may well benefit ‘business users’, i.e., people or companies that use platforms to provide goods or services to internet users. Changes in big tech’s business models prompted by the DMA, however, might also affect free internet services. In any event, the DMAwould give rise to significant changes and friction in the operation of the digital economy, which may result in frequent disputes and enforcement actions.European Company Law