Note: this article was translated from French by an automated tool When the European Commission announced, in June 2020, the future legislative package Digital Services Act, she mentioned the adoption of a new regulation former beforeimposing various obligations on digital players and a new competition instrument. The Digital Markets Act presented on December 15, however, does not constitute a competition tool. Rather, it is a matter of market regulation with the main objective of guaranteeing equal opportunities for digital players by supervising practices.
The reasons for the adoption of new legislation are known. The business model of platforms is very specific. They constitute two-sided, or multi-sided, markets in which they have market power with regard to several categories of users benefiting from the effects of crossed networks. The usefulness, for the drivers of a VTC platform, to participate in the platform is all the greater the greater the number of registered passengers (and vice versa). And the number of drivers and passengers on the platform is also dependent on the prices it charges for its different categories of users. In addition, these companies control the architecture of their platforms, which users access through their own applications. They frequently place themselves in competition with their professional users to offer their own goods and services according to the terms they determine (see F. G'sell, The European Commission and the Amazon business model,). Finally, the platforms have the possibility to collect the data generated by their different categories of users and to use it for their benefit. These peculiarities all lead to a high concentration of the market as well as to the emergence of situations of domination and barriers to entry.
In such a context, traditional competition tools seem to fail to clean up practices and rectify the structure of the market. Admittedly, the European competition authorities regularly open investigations and have already severely condemned, on several occasions, the large platforms such as, for example, Google in July 2018. But competition law does not, today, allow sanctioning all harmful behavior. Some competitors align their prices without actually reaching an agreement. Dominant firms already in place tend to systematically and preemptively acquire their potential competitors, usually disruptive small firms that threaten them, a phenomenon known as “killer acquisitions”. The most powerful platforms use their position of domination to impose unfair conditions on their professional users. In addition, the traditional remedies of competition law come too late, following lengthy investigations, even as digital markets evolve very quickly. Finally, the sanctions imposed do not always shake the large platforms, whose resources are colossal. On the whole, the current tools do not allow to tackle the structural problems.
These circumstances explain why the principle of regulation former before intended to regulate the behavior of the most powerful actors. The Digital Markets Act therefore does not constitute a competition tool, but a market tool, the scope of which goes, in principle, beyond just companies in a dominant position since it targets those which are able to control access to the market (gatekeepers). Companies subject to the new regulations (1) are therefore subject to specific obligations or prohibitions (2) and are placed under the control of the Commission (3).
- The companies concerned: market access controllers (" gatekeepers ")
Le Digital Markets Act regulates the behavior of companies whose main activity is to provide platform services (art. 1). It is therefore mainly all platforms that provide online intermediation services (marketplaces, collaborative economy), search engines, social network, video sharing, interpersonal communication, IT in cloud, advertising or operating system (section 2). It is sufficient that these platforms offer their services to users established in the European Union for the Regulation to apply to them, regardless of the place of establishment of the platforms concerned or the law applicable to the provision of their service.
It is also necessary that these platforms can be qualified as " gatekeepers ". For this, they must meet three cumulative conditions (Article 3):
- Have a significant impact on the internal market, a criterion deemed to be fulfilled if the company achieves an annual turnover in the European Economic Area equal to or greater than 6,5 billion euros during the last three financial years - or if the Average market capitalization or equivalent fair market value of the company was at least EUR 65 billion in the last financial year - and it provides its services in at least three Member States
- Operate a platform which acts as an important gateway for business users to end users, a criterion deemed to be met when the platform has more than 45 million monthly active end users established or located in the EU and more than 10 annual active business users established in the EU during the last financial year.
- Have a well-established and sustainable position in its activities or be likely to enjoy such a position in the near future, a criterion again deemed to be fulfilled if, during each of the last three financial years, the platform has counted more 45 million monthly active end users and over 10 annual active business users.
The fact, for the platform, of mastering the architecture while competing with its professional users was not retained as a criterion for the concept of gatekeeper. On the other hand, it was decided to take into account the market capitalization so as to be able to submit to the Digital Markets Act companies that do not yet have a large number of users in the European Union but have a significant financial base. For the rest, the gatekeepers are likely to correspond to the very large platforms to which the Digital Services Act also imposes heavy obligations (see F. G'sell, A new step in the regulation of online content: the proposed Regulation on digital services).
The criteria provided for in the text are not absolutely binding: it will be up to the Commission to designate the gatekeepers (art. 15), if necessary after an investigation. The Commission will thus be free to qualify as gatekeepers companies that do not correspond to the planned thresholds or offer services not listed in the text.
2. Obligations and prohibitions imposed on " gatekeepers »
Articles 5 and 6 of Digital Markets Act include lists of various obligations and prohibitions that should significantly change the daily lives of platform users. Contrary to what had been announced, the text does not include a “black” or “gray” list: all the obligations it provides must be respected. On the other hand, the regulation distinguishes between directly applicable obligations (Article 5) and those which will be the subject of further details (Article 6). Finally, the text provides for an obligation to notify concentrations (article 12) and to audit profiling techniques (article 13). In principle, all these obligations will have to be respected by the gatekeepers And this bydesign, by integrating them into the technology where appropriate. However, it will be possible for the Commission to impose only a fraction of these obligations on those who do not yet enjoy an established and lasting position (art. 15 (4)) or exceptionally to suspend the execution of an obligation threatening the economic viability of the platform concerned (Article 8).
i) Directly applicable obligations (Article 5)
Article 5 lists directly applicable obligations (and prohibitions), the main objective of which is to strengthen the independence of professional users.
- Certain provisions aim to leave professional users free of their movements, by allowing them to offer their services on other platforms under other conditions (art. 5 (b)) or to promote their services to clients acquired by the through the platform and to conclude contracts with them regardless of the purpose of their presence on the platform (art. 5 (c)). Consumers will be able to get in touch with professionals without going through the platform.
- Others aim to prevent platforms from imposing their ancillary services: they cannot make access to their main service conditional on the use of their own identification service (art. 5 (e)) or on the use of additional services: anyone wishing to sell an application on the App Store, for example, may not be subject to the payment service offered by Apple (art. 5 (f)).
- The gatekeepers »Will no longer be able to engage in a practice that is now widespread, which consists of cross-checking the personal data of their users with data obtained otherwise, by their other applications and services or from data brokers or business partners (art. 5 (a)). It will also no longer be possible to ensure, with the aim of combining personal data, that the user connecting to the main platform of the gatekeeper or systematically connected to its other services without having given their consent: for example, those who identify themselves on Facebook can no longer be identified on Instagram at the same time.
- Finally, the platforms will not be able to prevent their users from reporting their practices to the competent authorities (art. 5 (d)) and will have to communicate to the advertisers and the publishers to whom they provide advertising services on the platform, complete information, in particular as regards the remuneration paid and received (art. 5 (g)).
ii) Obligations to be specified (article 6)
Article 6 lists the prohibitions and obligations which will be subject to further clarification, if necessary within the framework of a dialogue between the Commission and the gatekeepers concerned. The Commission may specify in a decision the measures to be adopted by a gatekeeper given (art. 7).
- A first group of obligations on this list relates to user data: this involves preserving data from appropriation by users. gatekeepers by guaranteeing professional users full and free access to the data generated by their activity on the platform, such as data relating to visits, sales and customers (art. 6 (1) (i)).
- A second group of obligations aims to ensure the freedom to come and go of users, professional or not. End users should be able to uninstall applications already installed without service restriction (art. 6 (b)). All users should be able to use third party applications and application stores unless these threaten the integrity of the hardware and software (art. 6 (1) (c)). End users will have the freedom to choose their Internet service providers and the applications they want to use from the operating system of the gatekeeper. THE gatekeepers must guarantee the interoperability of ancillary applications, which means that third-party providers of ancillary services - such as payment or digital identification services - will be able to offer their services under the same conditions as the gatekeeper (art. 6 (1) (f)). Users, professional or not, will also have a right to portability, which means that they can join another access provider by taking their data with them (art. 6 (1) (h)).
- A third group of obligations concerns the competition between gatekeepers to their own professional users. The gatekeepers will be prohibited from prioritizing their own services in the results of their search engines (art. 6 (d)), a practice which led to the Commission's prosecution in the case Google Search (Shopping). THE gatekeepers will also not be able to use the data generated by the activities of professional users to compete with them (art. 6 (a)), a behavior attributed to Amazon which is currently the subject of proceedings of the European Commission.
- A fourth group of obligations concerns the equitable conditions under which the platforms must collaborate with their partners or with third parties. The gatekeepers offering an app store service (app store) must offer fair and non-discriminatory access conditions to application providers (art. 6 (1) (k)). The text also provides that the data relating to searches carried out by users on the search engines of gatekeepers should be made available to other search engine providers who so request, on fair, reasonable and non-discriminatory terms (art. 6 (1) (j)). Finally, advertisers and publishers must be able to access, at their request and free of charge, the platform's performance measurement tools and the information they need to carry out their own analyzes (art. 6 (g)).
iii) Notification of concentrations
The gatekeepers will have to inform the Commission of any proposed merger involving another platform or another digital service provider, regardless of whether or not this transaction is subject to the control of European or national competition authorities under the rules in force (Article 12 ). This provision seems here to respond to the difficulty created by “killer acquisitions”, but the notification of mergers does not carry the slightest consequence: the Commission does not have the power here to oppose the transaction. concentration, unless the provisions of antitrust law are applicable to it.
iv) Control of profiling activities
Any consumer profiling technique used by a gatekeeper within the framework of the provision of the services of its platform must be subject to an independent audit which will be communicated to the Commission (Article 13). Here again, it is difficult to determine what the consequences of an unsatisfactory audit might be.
3. Control and sanctions
It is at the Commission, assisted by the Digital Market Advisory Committee (s. 32), that it will be up to investigating and finding violations of the Rules. It may adopt a decision of non-compliance (art. 25) in which it will order the gatekeeper to cease his illegal behavior, to comply with his decision within a given period, and to provide an explanation of how he plans to comply with the decision.
The Commission may impose fines of amounts similar to those provided for in competition law. In the event of the most serious infringements, such as failure to comply with the obligations laid down in Articles 5 and 6, the Commission may impose gatekeepers fines not exceeding 10% of their total turnover for the previous financial year. This means that a company like Facebook, whose 2019 revenue was $ 70,7 billion, could face a fine of up to $ 7,07 billion. In the event of less serious infringements, such as failure to comply with the obligation to notify concentrations (art. 12) or to describe the profiling techniques used (art. 13), the Commission may impose fines not exceeding 1% of the total turnover of the previous financial year. Continuing infractions may result in fines payable periodically, with payments of up to 5% of daily turnover.
The Regulation also provides for the possibility of ordering, in the most extreme cases, structural measures, such as business divestitures sometimes ordered by the Commission in the context of merger control. Article 16 provides, in fact, that in the presence of a gatekeeper who systematically violated their obligations and thereby strengthened or extended their position as gatekeeper, the Commission may impose any behavioral or structural corrective measure proportionate to the infringement committed and necessary to ensure compliance with the Regulation. Structural measures may go as far as imposing the sale of an activity, but will only be possible in the absence of such an effective behavioral corrective measure or in the event that the structural measure would have less serious consequences for the company. gatekeeper than behavioral corrective action. Concretely, this means that a structural measure concerning Amazon could foresee that Amazon must separate from Amazon Basics, its division of private label (private label) products. It is noteworthy here that such a measure would take place not following an in-depth analysis of competition in the sector concerned but following the finding of a violation, by the sanctioned company, of the obligations imposed by the Regulation.
Overall, the proposed Regulation provides for very restrictive obligations and heavy penalties. The Commission has significant powers - including to amend the content of the Regulation if necessary - without any room for maneuver being left to the state authorities. The text also prevents member states from adopting national legislation imposing other obligations on gatekeepers (art. 1 (5)). In any case, if this text were to be adopted as it is by the European institutions, it would then be necessary to examine the question of its articulation with antitrust law and with the obligations imposed on digital service providers by the Digital Services Act. We should also question its effectiveness. Indeed, if the obligations imposed by the text, largely inspired by the current practices of the large platforms, are understandable, one can however wonder about the choice of an asymmetric regulation relating exclusively to the most important actors, then even that smaller companies can also engage in reprehensible practices with equally deleterious effects on the market.