News, views and reports

Lobbying EU Digitization

By Dr. Andreas Geiger, Founder, Alber & Geiger

The tech world is expecting drastic changes from Brussels’s new digital governance. Internal market and competition rules will redefine the EU’s digital transformation under the new geopolitical Commission, the one promised by the new President Ursula von der Leyen.¹ Margrethe Vestager, second time Commissioner for competition, will now officially oversee the EU’s Digital Single Market under her new portfolio.² Competition policy will take a much more politicized and geopolitical turn, as it will reflect the goal of an EU technological and digital leader.³ Most importantly, competition rules and policy will be revised so they work towards that end.

Competition regulation over technologies is covered by the European Digital Internal Market and European Digital Economy and is thus firstly intertwined with DG Connect.⁴ DG Grow has been interested in the competitiveness of the EU digital market and has a mandate to contribute to the Digital Single Market priorities, whereas it works together with EASME to ensure the protection of SMEs in that framework.⁵ It is also mandated to align consistently its policies with the Digital Single Market overseen by DG Connect, planned in the Single Market Programme 2021-2027, while it includes a more assertive new Competition Programme to address challenges in data and algorithms.⁶ In reflection to the areas affected, plenty Committees from the European Parliament, including IMCO, ITRE, ENVI, TRAN, BUDG, CULT, JURI and LIBE have ensured to contribute to both the Single Market and Digital Single Market Programmes 2021-2027.⁷ DG Grow is more inclined to protect industry, innovation and in particular smaller players, which is also transposed to the DG Competition rationale. Right next to DG Grow, DG Just, also in conjunction with the LIBE committee of the European Parliament, have contributed an additional regulatory aspect in the digital market, which is consumer protection. Indicative regulatory initiatives are the GDPR and Geo-blocking regulations, as well as DG Justice’s negotiations on the proposals of Directives such as the sales of goods and for the supply of digital content.⁸ The aforementioned initiatives while under DG Justice, have requested the involvement of other DGs, including DG Trade aside DG Competition, whereas further DGs are working closely with DG Connect to realize the Digital Agenda.⁹ DG Competition being at the forefront based on its competence in overseeing the functioning of competition, has conducted sector inquiries, but has also been called to take under consideration different aspects of the respective DGs’ priorities.¹⁰

The huge influx of high-tech innovations within the last years has put the EU in a position to rethink its role within global competition, with Member States calling for toughening up on big tech.¹¹ This made EU competition policy also a stabilization mechanism of overriding national, political and even geopolitical priorities. Lately it managed to spark geopolitical rivalries and introduces trade into the discussion, as it takes a collective position towards digital tax, a price that France had to pay with tariffs from the US.¹² Many sides have criticized the EU for protectionism by allegedly targeting US firms through its competition rules, especially in the seminal cases of big US tech firms, such as Apple, Google and Microsoft.¹³ This battlefield however, does not solely belong to DG Competition. The vast market shares of US firms within the EU internal market has raised a lot of flags for several stakeholders including European tech companies and their home Member States, rendering competition rules in the center of the EU’s defense mechanisms, as Member States’ firms started to growingly worry about their US rivals.¹⁴ The proposal for a EU Digital Tax has not been welcomed across the Atlantic, whereas the EU is even discussing the removal of unanimity requirement in the Council for taxation policy, to potentially feed into digital taxation.¹⁵ Simultaneously, for the first time in 20 years Vestager used interim measures against the US chipmaker Broadcom.¹⁶ Interim measures are now to be used more often as a competition tool. Competition rules will be revised, whereas tighter measures on mergers, reversal of burden of proof for infringers and new theories of harm are being planned.¹⁷ The Facebook antitrust proceedings even conceptualized “fairness” as a founding principle of competition law.¹⁸ This concept may facilitate the finding of abuse of a dominant position, from the perspective of exploitative abuse against consumers, whose data is being used as a form of currency. It provided a bridge into linking competition law with the digital and internal market control.¹⁹ DG Just and Connect among others are setting the level-playing field of the New Deal for Consumers, under the EU Digital Single Market Strategy.²⁰

Confused? You better are. Because the days when digitization was a competition case only are gone. It probably never was in the first place.

Footnotes

1. The von der Leyen Commission: for a Union That Strives for More (10 September 2019) Commission Press Release IP/19/5542 (https://ec.europa.eu/commission/presscorner/detail/en/IP_19_5542).
2. Ursula von der Leyen, ‘Mission Letter Margrethe Vestager: Executive Vice-President-designate for a Europe Fit for the Digital Age’ (Brussels, 10 September 2019) (https://ec.europa.eu/commission/sites/beta-political/files/mission-letter-margrethe-vestager_2019_en.pdf).
3. Answers to the European Parliament, Questionnaire to the Commissioner-Designate Margrethe Vestager (https://www.europarl.europa.eu/resources/library/media/20190927RES62423/20190927RES62423.pdf).
4. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Completing a Trusted Digital Single Market for All  (COM/2018/320 final) available at (https://ec.europa.eu/digital-single-market/en/news/completing-trusted-digital-single-market-all). DG Competition 2018 Annual Activity Report (https://ec.europa.eu/info/sites/info/files/comp_aar_2018_final.pdf).
5. DG Grow 2018 Annual Activity Report (https://ec.europa.eu/info/sites/info/files/grow_aar_2018_final.pdf).
6. Proposal for a Regulation of the European Parliament and of the Council Establishing the Programme for single market, competitiveness of enterprises, including small and medium-sized enterprises, and European statistics 2021–2027 (COM(2018) 441 final; DG Competition 2018 Annual Activity Report (https://ec.europa.eu/info/sites/info/files/comp_aar_2018_final.pdf).
7. Procedure File 2018/0231 (COD) Programme for single market, competitiveness of enterprises, including small and medium-sized enterprises, and European statistics 2021–2027, Key Players (https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2018/0231(COD)&l=en); Procedure File Digital Europe programme 2021–2027, Key Players ( https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2018/0227(COD)&l=en).
8. DG Justice and Consumers 2018 Annual Activity Report ( https://ec.europa.eu/info/sites/info/files/just_aar_2018_final.pdf).
9. European Data Protection Supervisor, Investigative activities of EU institutions and GDPR (C2018-0632) (https://edps.europa.eu/sites/edp/files/publication/18-10-30_letter_investigative_activities_eui_gdpr_en.pdf); ‘Europe’s Digital Single Market: DG Connect’ Scitech Europa (October 25th 2018) (https://www.scitecheuropa.eu/digital-single-market/90282/) accessed 10 December 2019.
10. Report from the Commission to the Council and the European Parliament: Final Report on the E-Commerce Sector Inquiry (SWD(2017) 154 final) (https://ec.europa.eu/competition/antitrust/sector_inquiry_final_report_en.pdf).
11. Ursula von der Leyen, ‘Political Guidelines for the Next European Commission 2019-2024’; Javier Espinoza and Guy Chazan, ‘Germany Calls on EU to Tighten Grip on Big Tech’ Financial Times (11 November 2019) (https://www.ft.com/content/2d538f22-048d-11ea-a984-fbbacad9e7dd) accessed 10 December 2019.
12. Jorge Valero, ‘We Will ‘React ad One’, EU Tells US Over French Digital Tax Dispute’ Euractiv (3 December 2019) (https://www.euractiv.com/section/digital/news/we-will-react-as-one-eu-tells-us-over-french-digital-tax-dispute/) accessed 10 December 2019.
13. Javier Espinoza, ‘EU Puts Big Tech under the Spotlight’ Financial Times (2 December 2019) (https://www.ft.com/content/22fb3456-14c5-11ea-8d73-6303645ac406) accessed 10 December 2019.
14. Guy Chazan, ‘Angela Merkel Urges EU to Seize Control of Data from US Tech Titans’ Financial Times (12 November 2019) (https://www.ft.com/content/956ccaa6-0537-11ea-9afa-d9e2401fa7ca) accessed 10 December 2019.
15. Sam Fleming and Jim Brunsden, ‘Brussels Steps Up Pressure on US Over Global Digital Tax Deal’ Financial Times (5 December 2019) (https://www.ft.com/content/db6148fc-1748-11ea-9ee4-11f260415385).
16. Antitrust: Commission Imposes Interim Measures on Broadcom in TV and Modem Chipset Markets (16 October 2019) Commission Press Release IP/19/6109 (https://ec.europa.eu/commission/presscorner/detail/en/IP_19_6109).
17. Jacques Crémer, Yves-Alexandre de Montjoye, Heike Schweitzer ‘Competition Law for the Digital Era’ (Directorate-General for Compatition) April 2019 (https://ec.europa.eu/competition/publications/reports/kd0419345enn.pdf).
18. Harri Kalimo and Klaudia Majcher, ‘The Concept of Fairness: Linking EU Competition and Data Protection Law in the Digital Marketplace’ (2017) 42 European Law Review 210; Damien Gerard, ‘Fairness in EU Competition Policy: Significance and Implications’ (2018) 9 JECLP 211.
19. Margrethe Vestager, ‘Competition and Fairness in a Digital Society’ AmCham EU 35th Competition Policy Conference, Brussels, 22 November 2018 (https://ec.europa.eu/commission/commissioners/2014-2019/vestager/announcements/competition-and-fairness-digital-society_en).
20. A New Deal for Consumers: Commission Strengthens EU Consumer Rights and Enforcement (11 April 2018) Commission Press Release IP/18/3041 (http://europa.eu/rapid/press-release_IP-18-3041_en.htm).