Browsing by Subject "digital markets"

More and more often in the digitalised world, consumers come into contact with undertakings operating within the zero-price market. That is, where the product or service is offered to the consumer at a price of zero. Examples of zero-priced markets are numerous, from shopping malls, to social media and credit cards. This market type is not an insignificant one, with Facebook and Google, two of the largest internet companies offering zero price goods, having a market capitalisation of $1,645 billion as of June 2020. The topic of data driven digital zero-price markets has been receiving increasing amounts of attention in recent years. The OECD, Commission, national competition law authorities and academics have increasingly been considering this market type. It is often said that the consumer pays to use these digital services with their person data. In online transactions, essentially all transactions require at least some disclosure of the user’s personal data. This personal data is highly valuable to undertakings, with companies willing to receive consumers data instead of being paid by them with money. Overall, the question which I pose is whether EU competition law can deal with the unique characteristics of these digital zero-price markets. The economic and consumer welfare grounding of Article 102 means that it is adaptable to zero-price markets, and the special characteristics of zero-price markets are to an extent already considered in a competition law analysis. This market type is unique and significantly different to the traditional market types that EU competition law has been faced with in the past. For one, these markets operate largely on the digital sphere, meaning that they are characterised by competition for the market, exceedingly fast innovation and unique barriers to entry. These markets are multisided, with consumers, advertisers, merchants and the undertaking all operating on unique parameters but interacting with one-another. Finally, the goods/services are provided at zero-price, which traditional economic analysis struggles to adapt to, whilst consumers are faced with alternative costs through their attention and information (data) and reduction of quality. The Google Search (Shopping) case shows these characteristics in action, and demonstrates the challenges which EU competition law faces when applied to this market type. It also shows the current capabilities of the law in dealing with this market type. There are ways that the law can be adapted, utilising new tests which focus on other cost parameters than price, putting more weighting on factors other than monetary price and looking at different competitive parameters such as quality. This thesis does not seek to criticise EU competition law as a whole. It is limited to considering specifically digital zero-priced markets. It is concluded that more can be done to ensure that its unique characteristics can be included in a competition law analysis. In this respect, the EU can become a leader, laying the groundwork for the future competition law treatment of these undertakings, and ensuring that it is properly recognised that consumers can face competitive harms even if it is not based upon a monetary price.

Digitalization requires new legislative tools that can effectively address the issues that are specific to digital markets. In the European Union, cases concerning dominant platforms used to fall under EU competition law and Article 102 TFEU, but this legal framework was sometimes ineffective in regulating issues that exist in digital markets. For instance, the Google Shopping case illustrates one of the difficulties of Article 102 TFEU in relation to digital markets, which are the abuses that are specific to digital markets, such as self-favouring. Digital markets evolve rapidly, and thus they require quick and effective responses from legislators. In order to further regulate digital markets, the European Commission introduced the EU Digital Markets Act (DMA) in 2020 and the DMA rules start to apply in May 2023. The overall objective of the DMA is to increase contestability and fairness in digital markets while simultaneously creating a more effective legal framework. The DMA is a sector-specific EU regulation that regulates the actions of the biggest digital platforms that are called gatekeepers, which offer their services to business users and end users located in the European Union. When the Commission designates a platform as a gatekeeper, the platform must follow the obligations set out by the DMA within six months after the designation. The main goal of this thesis is analysing the effectiveness of the regulation of digital markets after the DMA. As this thesis is finalized in April 2023 and the DMA rules start to apply in May 2023, this thesis focuses on the elements of effectiveness that can be evaluated now. In order to illustrate the effectiveness of the DMA, one of the central elements is the application of the DMA rules to the Google Shopping case. By applying the new legal framework to a case that was judged under the Article 102 TFEU framework, improvements in effectiveness will be portrayed in a more concrete manner. Furthermore, this thesis also examines the potential shortcomings when it comes to the effectiveness of the DMA. One of the most significant issues of the DMA is its inflexibility towards future developments. This thesis argues that while the DMA provides an effective framework for addressing the current issues in digital markets, it is unable to address future developments in digital markets effectively.