Eu to consider digital ecosystems and free services in big tech antitrust investigations

EU competition chief Margrethe Vestager announced an update to the Market Definition Notice to address the failure of antitrust and merger laws in keeping up with tech markets and companies offering free products or services.

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EU antitrust regulators will now consider digital ecosystems and the impact of free products or services when investigating Big Tech’s merger deals or market power, according to EU competition chief Margrethe Vestager. The Market Definition Notice, which determines whether companies have the market power to control prices or throttle rivals, has been updated to address criticisms that existing antitrust and merger laws are outdated in the digital age.

The update aims to keep pace with tech markets and companies that offer free products or services in exchange for user data. By considering digital ecosystems and free offerings, regulators can assess a company’s market power more comprehensively. Multi-sided platforms and digital ecosystems built around a mobile operating system will be examined to define a company’s market power in cases involving Big Tech.

The updated rules also allow market share to be determined based on sales, capacity, active users, or website visits. Non-price factors such as innovation in product development, reliable supply, and the quality of products and services will be emphasised. This could impact the pharmaceutical industry, as more than just pricing will be considered in evaluating market power.

Another addition to the assessment is the inclusion of imports and their impact on EU businesses. This recognises the need to consider the overall effect of imports on competition within EU markets.

The EU competition chief emphasised the importance of maintaining competitive markets to serve consumers best. The framework update aims to align EU antitrust regulations with the digital era and evolving tech markets. By considering digital ecosystems, multi-sided platforms, and free products or services, the EU seeks to create a more effective and comprehensive framework that promotes competition and protects consumers’ interests.