Europe's digital roadmap indicates two-pronged approach to platform economy and competition rules

By Francine Cunningham

02-2020

Margrethe Vestager gave an indication of how she intends to use her enhanced powers as both digital czar and competition law enforcer, when the European Commission presented its roadmap for Europe’s digital future on 19 February.

The Danish politician, who has the dual role of Executive Vice President for digital policy and Competition Commissioner, has signalled that competition rules alone may not be enough to ensure fairness, innovation and the entry of new players into the digital marketplace. Vestager appears to be taking a two-pronged approach to the online platform economy, making use of both the digital policy and competition tools at her disposal.

The Commission Communication on "Shaping Europe's digital future" outlines how the EU executive plans to apply “European values” to the digital ecosystem over the next five years. It foresees a range of proposals aimed at furthering the bloc’s digital transition, grouped under three headings:

• Technology that works for people: including initiatives to ensure Artificial Intelligence is developed in ways that respect people’s rights and earn their trust; protect people from cyber threats (hacking, ransomware, identity theft); as well as measures to accelerate the roll-out of ultra-fast broadband and expand Europe’s super-computing capacity.

• A fair and competitive economy: a forthcoming Digital Services Act “to strengthen the responsibility of online platforms and clarify rules for online services”, in addition to measures to increase access to high-quality data and to enable start-ups and small and medium-sized enterprises (SMEs) to access finance.

• An open, democratic and sustainable society: including plans to use technology to help Europe become climate-neutral by 2050, as well as initiatives to give citizens more control over their data and measures to fight online disinformation.

With respect to competition, the Communication states that it is important to examine whether current rules, such as anti-trust remedies, apply effectively in the digital environment. Large online platforms are highlighted for the pivotal role they play in the digital economy.

The Communication states: “Some platforms have acquired significant scale, which effectively allows them to act as private gatekeepers to markets, customers and information. We must ensure that the systematic role of certain online platforms and the market power they acquire will not put in danger the fairness and openness of our markets.”

Ensuring "fairness" in the digital economy is a recurring theme of the new Communication, which states that "a handful of companies with the largest market share" are deriving the greatest value created in a data-based economy. Future proposals are expected to introduce ex-ante regulation of "Big Tech" platforms in a forthcoming Digital Services Act.

Speaking at the Communication's launch, Vice President Vestager suggested that Europe has a "second chance" to strengthen its position in the field of technology, by harnessing the data companies produce. Access to data, as well as the pooling and sharing of data, are identified as crucial issues for Europe's digital future.

An ongoing review of the market definition notice will also take account of new digital business models, for example "free" services that users access while providing their data, and consider any implications for competitive constraints. In addition, the Commission is planning to launch a sector inquiry before the end of the year, with a strong focus on the digital market, but has not yet announced a particular sector.

The plans outlined in the Digital Future Communication, together with the White Paper on Artificial Intelligence and Data Strategy released on the same day (see details below), still have a long way to go before they are realised. Eventual regulatory proposals will have to be shaped by political and business realities. Over the next five years, Vice President Vestager will spearhead this aspirational project to assert EU leadership of the global digital economy.

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