Digital markets remain a focal point for antitrust enforcement

EU DMA – the frontrunner for global digital regulation

The (DMA) designation in September 2023 of six online platforms as digital “gatekeepers” across several “core platform services” is first out the post in setting a precedent for the regulation of “Big Tech”. However, with several gatekeepers disputing their designations, and with debates already active on the adequacy of compliance measures taken by gatekeeper firms (whose deadline for compliance is March 2024), it will be interesting to see how enforcement of the Big Tech firms under these new rules is implemented by the EU in practice.

It also remains to be seen how enforcement under the EU DMA will interact with various digital reforms being considered and implemented across other jurisdictions, most notably the UK’s Digital Markets, Competition and Consumers (DMCC) Bill, which is expected to come into force in late 2024.

Elsewhere, authorities have been considering what digital reform will look like and how closely it will mirror the EU precedent. South Africa has been drawing up principles that link remedial actions to the standards set by the DMA. India is also currently examining the need for digital sector-specific ex ante legislation similar to the DMA, with a report expected to be published in 2024. South Korea has proposed legislation to regulate the largest digital platform providers, and Australia has also announced its in-principle support for ex ante regulation for designated digital platforms, and other consumer and competition enhancing measures targeted at digital platforms with further consultation to occur in 2024.  

Continued scrutiny under existing tools

Pending the adoption of (and enforcement under) new digital regimes, regulators have continued to prioritise investigation of digital markets under their traditional armoury. In addition to pursuing several abuse of dominance investigations against Big Tech (see our abuse of dominance article for more details), 2023 also saw a continued focus on the use of market studies, reports and investigations as a means of keeping conduct in the digital sector under the spotlight.

The UK Competition and Markets Authority (CMA) opened reviews into cloud services and AI foundation models, and the European Commission (EC) and CMA have both expressed interest in Microsoft’s partnership with OpenAI, with the CMA seeking views from interested third parties on the potential impact the partnership may have on competition in the UK. In Australia, the Australian Competition and Consumer Commission’s Digital Platform Services Inquiry is ongoing with the most recent interim report in 2023 covering competition and consumer issues from digital ecosystems through the lens of smart home devices and consumer cloud storage solutions. In September 2023, the French competition authority also published its findings on the cloud computing sector, which was followed by an announcement of a dawn raid in the graphics cards sector.

Further in February 2024, the French competition authority opened inquiries and a public consultation regarding generative AI. In Turkey, the competition authority announced and published a report in relation to digital markets categorising anti-competitive concerns related to digital markets into seven different headings with possible legislative solutions to handle them within existing competition law.  In Japan, the Japan Fair Trade Commission has also been active in investigating digital markets, releasing market study reports on mobile operating systems, mobile app distribution, and news content distribution, in 2023. Although we have yet to see the impact in enforcement, in order to expand its existing tools, the Taiwanese authority has also formally broadened its guidelines and consideration factors for defining relevant digital product and geographic markets, as well as defining “multi-sided market” and “indirect network effect” to better capture the digital platform economy.

Authorities adapting technology for markets new and old

The integration of advanced technologies into antitrust enforcement strategies has been a notable development in 2023. Regulatory authorities, such as the U.S. Department of Justice Antitrust Division and CMA, have increasingly leveraged data science and AI to analyse complex market dynamics and identify anti-competitive practices. In addition to the developments in dawn raids noted elsewhere in this report, the EC has hinted at reforms that could allow it to conduct remote inspections in addition to dawn raids, in a world where an increasing number of files are now held in cloud-based storage systems. The increasing use of these technologies in enforcement tools reflects a broader recognition of the need for authorities to keep pace with the technological advancements within the markets they regulate.