Reinforcing the Digital Markets Act: Merger control and structural remedies

The European Commission has proposed the Digital Markets Act as a regulatory tool to address competition problems with Big Tech. It is mostly limited to behavioural ex ante regulation and thus can be seen to be at best a half-hearted and at worst a misguided way to effectively address the Big Tech challenge. A more effective competition law toolkit would provide extended options to use structural measures to tackle entrenched market dysfunctionalities. This includes expanded and strengthened merger control, extended possibilities to respond to infringements of competition law and equivalent provisions with structural remedies, and the availability of forced divestiture.

Around the globe, there is growing discomfort about the market position of some large digital players that serve as matchmakers and gatekeepers, controlling entire ecosystems. In Europe and the U.S., “Big Tech” is associated with the names of Google (Alphabet), Amazon, Facebook (Meta), Apple, and Microsoft—now widely famous under the acronym “GAFAM”—and possibly a few others. Those Big Tech players are accused of, among other things, foreclosing or absorbing potential competitors, erecting barriers to entry, leveraging their entrenched market positions, and exploiting users. While the immediate effect of their actions on consumers is often difficult to assess, the claim is that there is long-term harm to innovation and consumers. The European Commission has proposed the Digital Markets Act

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Martin Peitz, Jens-Uwe Franck, Reinforcing the Digital Markets Act: Merger control and structural remedies, February 2022, Concurrences N° 1-2022, Art. N° 104429, www.concurrences.com

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