Sprinkles of exquisite insight:

The EU Digital Markets Act: A Report from a Panel of Economic Experts (February 9, 2021).

Cabral, L., Haucap, J., Parker, G., Petropoulos, G., Valletti, T. and Van Alstyne, M., The EU Digital Markets Act, Publications Office of the European Union, Luxembourg, 2021, ISBN 978-92-76-29788-8, doi:10.2760/139337, JRC122910.

Introduction

… Hence this report is not to be interpreted as a commentary on the economic regulation of digital platforms: such a general theory simply does not exist. Rather, our hope is to present useful economic arguments that can make the DMA stronger when dealing with large and dominant digital platforms.

Some notes I jotted down during reading:

  • The gatekeeper-black-grey-list framework is really cool: classic antitrust (define market → prove dominance → design remedy) is too slow for digital market. So instead the three step process run:

    • Companies exceeds a “threshold” be identified as “gatekeeper”

    Then a black/gray list distinct actions:

    • Black = per se illegal actions, no defense. Eg self-preferencing.
    • Grey = presumed anti-competitive but rebuttable, with burden of proof on the gatekeeper. Eg tying/bundling and app-store exclusive.

  • On the Advertising Market in particular: Google is vertically integrated, sitting at every layer of the ad-tech stack. It’s giving conflict-of-interest analogy to financial exchanges.

  • Data portability. Ideally we want to oblige gatekeepers to share their data — eg accessible and downloadable for users, especially business.

  • Mergers: it’s quite intractable a problem: ~97% of GAFAM acquisitions never reviewed, none ever blocked. The double-edge sword effect of mergers is even harder to judge the countefactural of the network effect (or the mother-company-is-rich booster) on the merger.

  • Fairness. The report argues consumer-welfare standard breaks down because the platform run a trilateral exchange. But in my pov it’s just the problem’s so complicated — because sometime the platform don’t match transactions but their matching itself create extra surplus. I feel like the fairness problem is better analyzed case by case.