A New Era of Digital Regulation

Today all mature democratic jurisdictions introduce tectonic regulatory reforms aiming to recalibrate fundamentally their approach to digital markets in general and Big Tech specifically. Both Germany and the UK are at the avant-garde of this trend. Both jurisdictions introduce a new regulatory philosophy of competition into digital markets. Both are underpinned by the same rationale – though the mechanisms implementing the new trend differ, not least due to different traditions of economic regulation. The European Union adopted in 2022 the Digital Markets Act, a unique and very relevant new regulatory approach towards digital gatekeepers. Thus, there are three big legislative reforms that will be analysed in our project:

• Germany introduced § 19a to its competition act, the Gesetz gegen Wettbewerbsbeschränkungen (GWB) in 2021, aiming at stricter control of digital platforms. The new rule, sometimes apostrophised as a “revolution”, provides the German Bundeskartellamt (the Federal Cartel Office) with new powers vis-a-vis “undertakings with paramount significance for competition across markets”.
• The United Kingdom introduces a Digital Markets Unit (DMU) as part of its Competition and Markets Authority. The current legislative proposals (initially, A New pro-competition regime for digital markets, introduced for public consultation by BEIS and DCMS in July 2021 and now a new Digital Markets, Competition and Consumer Bill) designate for the DMU a list of new competences allowing it to tackle market failures.
• On the EU level, the Digital Markets Act (DMA) (Regulation (EU) 2022/1925) goes beyond the aim of protecting competition. Several companies have been designated as “digital gatekeepers” that face detailed and specific obligations in EU law that shall secure contestability of and fairness for digital markets. This is a completely new regulatory regime on the EU level.

The new German provision stays close to traditional competition law but gives more detailed provisions and strong powers to the Bundeskartellamt that needs to activate the provisions. The EU system prescribes very detailed rules that have to be followed per se and ex ante by digital gatekeepers. The concept in the UK aims more at distinct bespoke approaches for each company, based on a consultative negotiation process (called 'regulatory dialogue‘).

The EU, UK and Germany are at the forefront of the global regulatory experiment with very high stakes. All three place emphasis on competition and the protection of users of digital platforms. They increase the power of authorities to enforce the new rules. The effects of this regulatory revolution are not yet foreseeable.