The EU’s legislative process is showing its typical limitations. By contrast, the UK could soon have a new and effective competition framework for digital markets
After a quick start, negotiations have hit stumbling blocks: The European Commission was one of the earliest jurisdictions to present proposals to regulate Big Tech – both to address competition and online harms issues. In December 2020, the EC published two proposals in parallel for a Digital Markets Act and a Digital Services Act, which would introduce ex-ante regulation for gatekeepers and stronger oversight over the removal of illegal content online. However, the discussions of these proposals within the EU Parliament and the EU Council have shown once again the difficulties the EU faces in passing legislation quickly and effectively.
Parliament and Council will both struggle to reconcile their respective positions: Disagreements have emerged within the Parliament on the scope of the legislation. The main centre-right group, the EPP, wants to focus on the largest platforms and only regulate ‘core’ digital services and companies with a market value above €80bn. The Socialists & Democrats (S&D), which are the second largest group in the EU Parliament, want to include a broader range of digital services (e.g. video and music streaming, mobile payments, cloud) and regulate companies valued above €50bn. In parallel, disagreements are emerging within the Council, where some countries are aiming for a more targeted approach to ecosystems of services and for a stronger role of national competition authorities. The aim to wrap up the proposal by spring 2022 now looks increasingly unrealistic, with references in the latest text changed to "as soon as possible."
The UK is a lot closer to having a regime in place: In the meantime, the UK Government has just wrapped up its public consultation on the new regime for digital markets, and could introduce legislation in the first half of 2022. In the consultation, the Government made clear that it was still uncertain about several aspects of the proposal, such as for example the scope of the remedies the Digital Markets Unit will be able to impose, or how to design the thresholds of the new merger regime for firms with Strategic Market Status. However, once the Government has ironed out these aspects it looks set to legislate quickly, and introduce a new framework that appears to strike a reasonable balance between promoting competition and ensuring innovation.
Source: https://www.ft.com/content/7e8391c1-329e-4944-98a4-b72c4e6428d0
