This report explores how competition policy should evolve to continue to promote pro-consumer innovation in the digital age.<\/p>\n
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What are the main specific features of digital markets ?<\/span><\/strong><\/p>\n 3 key characteristics of the digital economy:<\/p>\n A consequence of these characteristics is the presence of strong \u201ceconomies of scope\u201d, which favour the development of ecosystems and give incumbents a strong competitive advantage. Large incumbent digital players are very difficult to dislodge. There is also a reasonable concern that dominant digital firms have strong incentives to engage in anti-competitive behaviour.<\/p>\n <\/p>\n What should be the goals of EU competition law in the digital era ?<\/span><\/strong><\/p>\n The basic framework of competition law, as embedded in Articles 101 and 102 of the TFEU, continues to provide a sound and sufficiently flexible basis for protecting competition in the digital era.<\/p>\n \bBUT:<\/p>\n What is the application of competition rules to digital platforms and data ?<\/span><\/strong><\/p>\n In order to encourage exploration by consumers and to allow entrant platforms to attract them through the offer of targeted services, it is key to ensure that multihoming and switching are possible and dominant platforms do not impede it. Data regulation can play an important role to foster multihoming, the offering of complementary services, and therefore competition:<\/p>\n What is the role of merger control in preserving competition and innovation ?<\/span><\/strong><\/p>\n This issue deal with acquisitions by dominant platforms of small start-ups with a quickly growing user base and significant competitive potential.<\/p>\n Many of these acquisitions may escape the Commission\u2019s jurisdiction because they take place when the start-ups do not yet generate sufficient turnover to meet the thresholds set out in the EUMR. The best way to handle these acquisitions is to inject some \u201chorizontal\u201d elements into the \u201cconglomerate\u201d theories of harm and try to answer the following questions:<\/span><\/p>\n (i) Does the acquirer benefit from barriers to entry linked to network effects or use of data? The test proposed here would imply a heightened degree of control of acquisitions of small start-ups by dominant platforms and\/or ecosystems, to be analysed as a possible strategy against partial user defection from the ecosystem.<\/p>\n <\/p>\n\n
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\n(ii) Is the target a potential or actual competitive constraint within the technological\/users space or ecosystem?
\n(iii) Does its elimination increase market power within this space notably through increased barriers to entry?
\n(iv) If so, is the merger justified by efficiencies?<\/p>\n