Shaping the new modality of the digital markets: The impact of the DSA/DMA proposals on inter-platform competitionClick here to read the full article online
The provisions of both legislative proposals make it evident that the attention of the drafters is focused on the protection and the promotion of intra- rather than inter-platform competition. Such an approach is very understandable, as most of the tasks in terms of controlling and shaping the ways of doing digital business in the EU are achievable by an effective enforcement of the measures designed to protect and encourage competition within, not necessarily between, core platform services. Intra-platform competition is the most important and most realistic dimension of competition in the digital markets. In addition, it may often be the case that inter-platform competition could be myopically criticised by business users themselves. The emergence of meaningful inter-platform alternatives forces them to adjust to the requirements of the new upstream entrant. Such adjustments often lead to duplication and fragmentation. As platform competition often consists of more than two vertical layers, there may be many business users with de facto entrenched positions within a platform-gatekeeper. Inter-platform competition makes their position less entrenched, as it facilitates new entries into those markets. This makes a top-layer inter-platform competition (i.e., competition between CPSs) even more important to seek, but even more difficult to achieve. From the functional perspective, achieving real inter-platform competition in the digital markets, with their natural susceptibility to monopolisation, is almost impossible without the systemic prioritisation of new entrants; and such systemic prioritisation is almost impossible without invoking measures very close to the borderline of acceptability in terms of protecting the principles of free market and equidistant regulatory neutrality. It would be a truism to note that any attempt to support a local entrant, which does not meet the highest quality thresholds in terms of delivering (rather than just promising) the digital services comparable to those offered by the incumbent, would be as grotesque as it would be counterproductive. Clearly, the regulatory steps directed towards the promotion of inter-platform competition should stop at the level of designing and enforcing the rules, enabling and encouraging such an entry. This does, however, leave room for considering the protection and promotion of inter-platform competition as an important goal of the EU digital competition law, and for a discussion about the specific features of inter-platform competition. The main question in this respect would concern the type of inter-platform competition that the rules and policies would seek to promote. On one hand, the systemic trend towards the synergy of digital services, single-homing and practical functionality impel the incumbents to expand into areas entrenched by other gatekeepers. The ultimate goal of such a move is the creation of a comprehensive digital ecosystem, locking the users into a single platform by offering the whole spectrum of digital products and services and making anything existing outside the ecosystem both inconvenient and unnecessary. The real alternatives to the existent incumbents would be undertakings of comparable size and recognition, leveraging their expertise and resources from the entrenched market to the new and vice versa.