Market power issues, dominant platforms, Europe’s economic recovery and digital competition

Market power issues, dominant platforms, Europe’s economic recovery and digital competition

COVID-19 has resulted in a marked increase in remote working and encouraged EU businesses and consumers to make the digital transformation necessary in order to thrive in the new economy. Against this backdrop, fair competition and innovation in the enterprise software ecosystem will be essential preconditions of a strong economic recovery for EU businesses.

There are concerns, however, that the behaviour of a few powerful gatekeeper platforms is jeopardising competition and innovation, preventing consumers from enjoying the benefits of a level playing field and taking advantage of new products and services. Slack’s recent complaint against Microsoft is an example.

On 01 October 2020, Romanian Member of the European Parliament Carmen Avram on behalf of the Group of the Progressive Alliance of Socialists and Democrats posed a written parliamentary question to the European Commission. MEP Avram asked, “how does the Commission intend to ensure a digital ecosystem for enterprise software tools that promotes fair competition, innovation, openness, and user choice in the digital economy?”

In a more pointed question MEP Avram asked, “what actions is the Commission taking, or willing to take, to investigate possible violations of EU competition law by dominant gatekeeper platforms in this important ecosystem?”

In closing, MEP Avram stated that “Slack claims Microsoft is ‘abusing its market dominance to extinguish competition in breach of European Union competition law’ and enquired “will an official investigation be launched, and how will the Commission ensure that any investigation proceeds in a timely manner, mitigating potential harm to European businesses and consumers?”

On 18 November, Executive Vice-President Margrethe Vestager (A Europe Fit for the Digital Age), responded on behalf of the European Commission. In her answer, she highlighted that the Commission is “committed to ensure a level playing field and the full respect of European competition rules in the digital sector to allow innovative digital businesses to grow within the Single Market and compete globally”.

Executive Vice-President Vestager stated that “concerning the first two questions, the Commission is planning to present a Digital Markets Act to address more effectively the problems arising in digital markets” and clarified that “it would combine two complementary pillars, the ex-ante rules targeted at digital platforms having the characteristics of gatekeepers setting out clear do’s and don’ts with a dynamic market investigation framework to examine digital markets prone to market failures”.

Executive Vice-President Vestager further explained that “in relation to the third question, the Commission is assessing the complaint lodged by Slack concerning Microsoft under the Commission’s standard procedures”.

Lastly, she declared that “the duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertaking concerned cooperates with the Commission and the exercise of the rights of defence”.

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