ANTITRUST REGULATIONS IN THE DIGITAL MARKET
R&C: Could you provide an overview of the challenges surrounding antitrust regulation of the digital economy faced by national governments? What key concerns need to be addressed?
Yeowart: The move to ex ante regulation in the European Union (EU) and the UK creates significant new challenges for regulators and companies alike. Case teams, particularly those lacking specialist knowledge, will struggle to run thorough, forward-looking assessments and make ‘pro-competitive interventions’ in digital markets, characterised by rapid innovation. Companies will also have significantly increased compliance burdens that may discourage investments that they would have previously made. National governments will therefore need to strike a careful balance to ensure ex ante enforcement does not unduly punish companies for being successful or discourage further innovation that would otherwise benefit consumers. Too much discretion allowed to regulators will lead to increased legal uncertainty and potentially result in divergent outcomes in different jurisdictions that are running parallel investigations. National governments will also need to carefully consider how antitrust enforcement properly intersects with other digital regulatory initiatives, such as those relating to data privacy and online harm.
Baeten: Regulatory initiatives such as the EU’s Digital Markets Act (DMA), the UK’s Digital Markets, Competition and Consumers Act (DMCCA) and section 19a of the German Act against Restraints of Competition (ARC) all stem from the belief that traditional antitrust enforcement in tech has been too slow, and the resulting fines, although often significant, have failed to protect competition in digital markets. Instead, these so-called ex ante rulebooks for large digital companies are expected to generate faster and better enforcement.
Oct-Dec 2024 Issue
Davis Polk & Wardwell London LLP
Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates