Almost a\nyear has passed since Germany\u2019s Minister Peter Altmaier appointed an expert\ncommission to review the European competition law framework in the digital age.\nThe group, chaired by Martin Schallbruch, Heike Schweitzer and Achim Wambach, was\nasked to draw up recommendations for the further development of European\ncompetition law by autumn 2019. Just in time, actually on the very day when Ursula\nvon der Leyen presented her nominees for the future Commission Cabinet in\nBrussels, the interdisciplinary \u201cCommission 4.0\u201d delivered its results to Altmaier\nin the form of an 85-page report<\/a> (the link goes to an English press release\nby the Ministry, the report is available in German only at present).<\/p>\n\n\n\n As was\nstressed several times during the presentation of this report, the work of this\nCommission was not directly related to the forthcoming 10th amendment of the German\ncompetition act (GWB). Thus the three chairpersons \u2013 according to their own statements\n\u2013 were asked not to speak in the press conference about the 10th amendment. At\nleast, Heike Schweitzer disclosed that the relevant people from the Ministry had\nbeen present during the meetings of the commission and had eagerly taken notes.\n<\/p>\n\n\n\n Schweitzer, a professor at Humboldt University Berlin,\nhad only recently delivered a well-known report\nas a special adviser<\/a> to Commissioner Vestager (together with Jacques Cr\u00e9mer\nand Yves-Alexandre de Montjoye). The new report is driven by the fact that\nGermany will take over the EU Presidency in the second half of 2020, for which\nsome concrete proposals for legislative measures seem to be needed. The present\nreport is therefore intended to outline what the new European Commission will\nthen work on. The report from Berlin becomes more concrete on some points where\nthe report for Brussels had only pointed at problems.<\/p>\n\n\n\n In his\ndescription of the commission, Minister Altmaier had made it quite clear in\n2018 what it was actually all about: \u201cTo secure and preserve Europe’s position\nand competitiveness in digital markets […] and thus at the same time economic\nand social prosperity\u201d. In view of the dominance of American and Chinese\nplatform operators in the digital sector, European competition law is to be\nmodernised and its legal basis in the digital sector \u201charmonised and merged\u201d.\nHeike Schweitzer summed it up by saying that, on the one hand, the taming of\nGoogle, Amazon & Co. is still lacking and, on the other hand, the European\ndigital economy must be promoted in order to catch up with the established\ngiants. The \u201cCommission 4.0\u201d set itself the goal of presenting long-term and\nsustainable solutions. In terms of content, three thematic blocks were formed,\neach of which was worked on by a working group under the leadership of one of\nthe chairpersons. Achim Wambach, an economics professor who heads the\nMonopolies Commission in Germany, and his team took care of digital platforms,\nMartin Schallbruch, an IT expert and former government official, and his team\ndealt with the role of data and Heike Schweitzer took \u201cthe rest\u201d.<\/p>\n\n\n\n The result\nis 22 recommendations, some of which – in the case of implementation – can be\ndescribed as actually very extensive and, above all, concrete. Six categories\ncan be distinguished.<\/p>\n\n\n\n The\nCommission proposes to work on the methodology of market definition for digital\nmarkets. Accordingly, the European Commission is to revise the 1997\nnotice on the definition<\/a> of the relevant market. In addition, a separate\nCommunication on market definition and market power in digital platforms should\nbe published. In this respect, the Bundeskartellamt has already summarised both\nits practice and that of the Commission in a working\npaper in 2016<\/a>. The EU Commission would already have a template for the\nimplementation of this recommendation.<\/p>\n\n\n\n According\nto the expert commission, access to data is a source of innovation and\ncompetitive opportunities. However, ideas such as those considered by the German\nSocial Democrats, in particular, in their “Data for all” initiative\nseem premature. At any rate, a cross-sector regulation does not seem to be\nfeasible at present. However, a framework directive is recommended with\nprinciples under which conditions users should be allowed to provide third\nparties with access to their user accounts. This is modelled on the Second\nPayment Services Directive (PSD II), which allows account holders to give\nothers access to their accounts.<\/p>\n\n\n\n The\nCommission of Experts otherwise proposes more cautious steps. The most\nfar-reaching of these would probably be the establishment of data trustees<\/em> to manage the provision of\ndata for those affected. Although the ideas announced by Martin Schallbruch in\nthe press conference for such institutions sounded quite concrete, the\nCommission only recommends the \u201cinvestigation of possibilities of establishing”\nin the report. <\/p>\n\n\n\n More\nconcrete recommendations relate to the use and provision of public sector information\n(PSI). For example, data received by the public sector within the framework of\nservices of general interest should be made available to third parties (\u201copen\ndata\u201d). To this end, the experts recommend that a data strategy be drawn up at\nEuropean level which sets out a concept for the cross-sector collection, use\nand provision of PSI. The UK “Open Data\nInstitute”<\/a> is seen as a possible model.<\/p>\n\n\n\n There is also\na side blow towards data protection authorities: the fragmentation of data\nprotection in Germany, where the L\u00e4nder organise data protection, is to be\neliminated in favour of a central authority.<\/p>\n\n\n\n With regard\nto the stronger taming of established platforms with market power, the\nCommission of Experts (“in majority”) proposes the creation of a\nEuropean Platform Regulation – and of course a fact-finding mission on “cross-market\nforeclosure strategies in the digital economy”. In order to be an\naddressee of the planned regulation, absolute minimum revenues or user numbers\nmust be achieved in addition to the market dominance criterion. This is\nprobably intended to ensure that only Google, Amazon & Co. are really\ncovered by the regulation. <\/p>\n\n\n\n In essence,\nthe Regulation may have three rules of conduct for platforms:<\/p>\n\n\n\n The first\nis a ban on self-preferencing in relation to third-party providers. This\nconcerns so-called hybrid platforms which both offer the platform intermediation\nservice and provide goods and services themselves. The best example of this is\nAmazon, which on the one hand operates the Amazon marketplace and on the other\nalso acts as a trader of certain goods. The case recently opened by the\nCommission against Amazon also deals with this problem. There is the accusation\nthat Amazon prefers its own dealer activity on the Amazon marketplace by\nfavouring itself in the selection of the so-called BuyBox dealer. The\nP2B Regulation<\/a>, which came into force on 11.07.2019, requires digital\nplatforms to disclose such selection and ranking processes. The expert\ncommission’s proposal goes beyond this transparency requirement and would make\nconcrete demands on the selection and ranking process.<\/p>\n\n\n\n In\naddition, a Platform Regulation should oblige the addressees to enable the\nportability of user and usage data in real time and in an interoperable data\nformat, and to guarantee interoperability with complementary services. Achim\nWambach discussed this using the example of navigation instruments or music\nstreaming services. When switching cars, it should be possible from one day to\nthe other to access information such as last visited destinations and the like\nin the new car (from another manufacturer). The same should apply to your own\nplaylists. A change of supplier should not lead to their loss. And all this at\na speed that does not result in a noticeable transition period.<\/p>\n\n\n\n Finally, the established platforms are to be\nobliged to set up alternative dispute resolution procedures for disputes over\ncontent and items offered via the platform. It is primarily a question of\nresponsibility for breaches of obligations and rights by users of a platform. The\nexperts reject any general liability on the part of the platforms. In the report,\nthey explicitly refer to possible infringements of intellectual property and\ncontent that go beyond the limits of freedom of expression protected by\nfundamental rights. In their view, the establishment of dispute resolution\nbodies on established platforms could counter the risk of censorship in the\nform of overblocking. According to the report, the competitive relevance arises\nin particular from the fact that market-dominating platforms as \u201crule-setters\u201d\nalso have a “special obligation” vis-\u00e0-vis users to ensure\nundistorted competition between users.<\/p>\n\n\n\n In addition\nto the recommendations for action to strengthen the control of dominant\nplatforms, the \u201cCommission 4.0\u201d has also issued two recommendations what not to\ndo. This concerns the merger activities of established platforms. At present,\nthe Commission advises against reforming the thresholds of the Merger\nRegulation – for example into the direction of a transaction volume based threshold\nas in Germany. They also reject the idea of a system of (additional) ex-post\ncontrol of mergers. The ideas came up with regard to the systematic acquisition\nof innovative start-ups by established platforms, the competitive relevance of\nwhich only becomes clear in the aftermath of a merger (“killer\nacquisitions”). An observation of the phenomenon and reports to the\nCouncil and the Parliament should suffice for the time being. <\/p>\n\n\n\n However,\nthe Commission recommends the development of guidelines for a more concrete\napplication of the SIEC test when innovative start-ups are purchased by\nestablished platforms. Particular attention should be paid to “data-based,\ninnovation-based and conglomerate theories of harm”.<\/p>\n\n\n\n Following\nthe hearing of many European digital companies, the Commission came to the\nconclusion that legal certainty is required for cases of cooperation in the\ndigital sector, e.g. with regard to data pooling. The EU Commission should make\nthis a priority. And to this end, the Commission recommends the establishment\nof a voluntary filing procedure with the EU Commission, under which companies\ncan have digital cooperations tested and receive a legally binding decision (or\ncomfort letter?) within a short period of time. The experts thus propose a partial\nreturn to the system of exemption procedures that was actually abandoned with\nthe introduction of Regulation 1\/2003. As they point out, this project can\nprobably only be achieved with a considerable increase in the staff of the\nDirectorate-General for Competition.<\/p>\n\n\n\n In\nprocedural law, the Commission does not propose any legislative change. They\ndiscussed a reform of the provisional measures (Art. 8 Regulation 1\/2003). Yet,\ninstead of legislative intervention, the \u201cCommission 4.0\u201d calls on the EU\nCommission to proactively examine the use of such measures on a case-by-case\nbasis in the future. In this context, Heike Schweitzer highlighted the\nCommission’s action\nin the proceedings<\/a> against US chip manufacturer Broadcom<\/em>. In this case, Team Vestager had brought up interim\nmeasures for fear that a later decision could “go nowhere” due to the\nfast-moving nature of the markets concerned.<\/p>\n\n\n\n The\nCommission has also considered institutional adjustments to competition law.\nThis resulted in two recommendations. The first is aimed at better coordination\nof the EU Commission’s various policy areas. To this end, a Digital Markets\nBoard is recommended at the General Secretariat. <\/p>\n\n\n\n In\naddition, an EU agency to accompany the digitisation of markets (Digital\nMarkets Transformation Agency) could be set up on a temporary basis. It would support\nthe Digital Markets Board and collect and process information on market\ndevelopments and technical developments. In addition, this agency could set up\nand coordinate a network of the corresponding member state institutions.<\/p>\n\n\n\n The\npublication or entry into force of guidelines, communications and regulations\nis generally preceded by a long-term consultation or legislative process. The\nestablishment of an EU agency also and above all takes time. In summary, it is\ntherefore unlikely that the recommendations of the German Commission can be\nimplemented too quickly. Nevertheless, the ambitious recommendations are\nalready providing support – albeit only on a more psychological basis – for the\nDirectorate-General for Competition in the ongoing proceedings against Google\nand Amazon.<\/p>\n\n\n\n Lucas Gasser is a doctoral student of professor\nRupprecht Podszun and a research assistant at the Chair of Civil, Commercial\nand Economic Law (Professor Tobias Lettl) at the University of Potsdam.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" In Berlin, the German Commission for a Digital Competition Law (\u201cKommission Wettbewerbsrecht 4.0\u201d) handed over its proposals for the reform of the EU competition framework to German Economics Minister Peter Altmaier. The task of the expert group was to recommend changes of EU law. Lucas Gasser was at the press conference for D’Kart and gives a first overview of the German contribution to the Eurovision Competition Contest. Almost a year has passed since Germany\u2019s Minister Peter Altmaier appointed an expert…<\/p>\nEU, not GWB; concrete, not\nabstract<\/h1>\n\n\n\n
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The mission<\/h1>\n\n\n\n
1: Adjustment of market\ndefinition<\/h1>\n\n\n\n
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2: Handling of data<\/h1>\n\n\n\n
3: Tougher control of\npowerful incumbent platforms<\/h1>\n\n\n\n
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4: Legal certainty for\ncooperation<\/h1>\n\n\n\n
5: Recommendations for\nchanges in procedural law<\/h1>\n\n\n\n
6: Recommendations for\ninstitutional changes<\/h1>\n\n\n\n
The next steps<\/h1>\n\n\n\n
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