Regulators in Australia, Germany, and the UK highlight the importance of international coordination when regulating digital markets
Competition authorities’ push for stronger powers on digital markets continues: In the last two years, regulators in several countries have made the case for ex-ante regulatory frameworks and for a reform of competition law to keep up with the complex and fast-moving nature of digital markets. Highlighting the importance of international coordination, the authorities of Australia (ACCC), Germany (Bundeskartellamt), and the UK (CMA) issued a joint statement today and held an online event in which they called for more rigorous oversight of mergers. The statement declares that merger controls are “the first line of defence” to prevent companies from developing market dominance.
Intervening ex-post is not enough: During the panel, the chairs of the three authorities noted that the acquisitions carried out by Big Tech since 2008 have gone largely unchecked – highlighting that hardly any of the 400 acquisitions of Amazon, Apple, Facebook and Google have been blocked. The argument goes that this has entrenched the market power of these companies and allowed them to prevent the rise of new competitors. The CEO of the CMA noted the importance of focusing on the long-term market structure, arguing that there is a false dichotomy between protecting competition and spurring investment. The representatives of the three authorities agreed that behavioural remedies are often ineffective and insufficient, due to changing market conditions and the difficulties to monitor compliance.
Legislation to further empower competition authorities is coming: During the event, the Chairman of the ACCC confirmed there will be legislation to update the merger regime in Australia by the end of the year. In Germany, the Government has already amended the thresholds for merger control, so that the Bundeskartellamt can focus on the mergers that matter the most. In the UK, the Government will legislate during 2021 and could take on board the advice issued by the Digital Markets Taskforce last December. However, the CEO of the CMA highlighted the importance of having other merger regimes on the same page, particularly the US, due to the global nature of digital markets. Otherwise, there is a risk of a “direct negative impact on ours as well”.
