EU Will Give Itself Powers to Step in and Correct Failing Digital Markets

The EU’s competition commissioner Margrethe Vestager today announced that the Union will grant itself stronger powers to “step in” and enforce its antitrust and harmful content rules, outlined in its proposed ‘Digital Services Act’ against the largest of the tech giants.

Currently, EU law leaves regulation of digital services in the hands of regional authorities, rather than the EU itself. While the EU writes rules which guide the behaviour of tech companies, it’s up to individual member states to write these rules into their own national laws, and then to appoint a national regulator to enforce them. And national regulators also hold responsibility for conducting ‘market investigations’, where there are concerns that an entire market is not functioning properly.

But as part of the Digital Markets Act, the EU will have power to step in and enforce the new rules itself, rather than relying on regulators in individual countries to take action. The EU will also put a framework in place to standardise how market investigations are run across the single market, and to make sure national authorities cooperate with one another.

Vestager, speaking this morning at an event run by the European Policy Center, said the current system has left the EU unable to force the largest tech companies to change their behaviour. “Many national authorities have powers […] that allow them to investigate markets, for instance, or to make sure that companies which aren’t dominant deal fairly with the smaller businesses that depend on them,” she said. “The risk, though, is that we’ll have a fragmented system, with different rules in different EU countries. That would make it hard to tackle huge platforms that operate throughout Europe, and to deal with other problems that you find in digital markets in many EU countries.”

Vestager added the risk with this system is that “we’ll always find ourselves playing catch-up, while platforms move from market to market, using the same strategies to drive out their rivals”.

But by handing new powers to the EU itself, Vestager said it will be able to properly hold the tech giants to account for harmful practices which apply across the whole of the EU.

“For the world’s biggest gatekeepers, things are going to have to change,” she said. “They are going to have to take more responsibility, for the effects that they have on our safety and our opportunities. The new rules that we’ll propose in a few weeks will give them that responsibility – they’ll also make sure we have the powers to enforce those duties.”

The finer details of the Digital Services Act and Digital Markets Act will be unveiled in early December.

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