Digital Markets

On 18 July 2024, the current President of the European Commission (“Commission”), Ursula von der Leyen, was reconfirmed by the European Parliament for a second 5-year term. As part of her reconfirmation, President von der Leyen delivered a speech before the European Parliament, complemented by a 30-page program, which lays down the Commission’s political program for the next five years.

A key pillar of the program – “A new plan for Europe’s sustainable prosperity and competitiveness” – has the objective of combining competitiveness and prosperity with the achievement of the European Green Deal goals.

Specifically on competition policy, according to President von der Leyen, a new approach is needed to achieve this objective. This blog post projects where competition policy is likely headed in the 2024-2029 period by commenting on the most relevant paragraphs of the program.Continue Reading The 2024-2029 Commission Political Guidelines: Where Is Competition Policy Likely Headed?

This year, the UK’s Competition and Markets Authority (“CMA”) is set to gain a range of new enforcement powers under the Digital Markets, Competition and Consumers (“DMCC”) Act (the final text is now available here). The DMCC Act received Royal Assent on 24 May 2024. However, with certain exceptions, the Act’s provisions will not come into force until secondary legislation is passed. The CMA initially expected its new responsibilities to become operational in the Autumn, but this timeline may be delayed due to the UK’s election on 4 July. On the same day as the DMCC Act became law, the CMA published for consultation its new Digital Markets Competition Regime Guidance.

An outline of the key provisions of the DMCC Act can be found here. As the CMA sets the groundwork for exercising its powers under this new regime, this blog post considers five practical considerations for firms active in the UK.

Key takeaways:

  1. The CMA will administer the new regime through a specialist Digital Markets Unit, which was established over three years ago.
  2. The DMCC Act may diverge from the EU’s Digital Markets Act, both in the companies being designated, and the obligations imposed on designated companies.
  3. The interplay between the DMCC regime and existing regulatory obligations – particularly the GDPR – is likely to raise practical challenges.
  4. We expect the CMA to exercise its powers under the digital markets regime alongside existing antitrust tools (which the DMCC Act amends).
  5. The CMA’s jurisdictional thresholds to review mergers under the UK’s merger control regime will change as a result of the DMCC Act.

Continue Reading The UK’s New Digital Markets Regime: Some Key Takeaways

The Digital Markets, Competition and Consumers (“DMCC”) Act received Royal Assent on 24 May 2024 (the final text is now available here). The DMCC Act will only enter into force, however, when secondary commencement legislation has been enacted (with some minor exceptions). This is expected to occur in Autumn 2024, but it…

Continue Reading Overview of the UK’s New Digital Markets Regime

The Digital Markets Act (“DMA”) will apply from 2 May 2023. To facilitate its implementation, the European Commission (“Commission”) aims to publish an accompanying DMA Implementing Regulation  (“IR”). In anticipation of this, the Commission has sought feedback via a public consultation on the draft IR between early December and 9 January 2023.

The draft IR addresses a range of procedural aspects concerning the DMA, including gatekeeper designation and core platform service notifications, opening of proceedings, the right to be heard, and access to the file. By contrast, the draft IR is silent on the Commission’s investigative powers during the gatekeeper designation process and the process of further specifying the obligations set out in Article 6 DMA (both of which gatekeepers will undoubtedly be eager to learn more about).

The Commission is aiming to publish the final IR “well before” the DMA starts applying in May 2023, and it will apply from the same date as the DMA. Whilst the draft IR may still be subject to changes before the final version is adopted, it already provides valuable insights into the Commission’s thinking. How stakeholder feedback might affect the position as currently set out in the final IR remains to be seen.

Two themes in the draft IR – each further outlined below – are particularly noteworthy:

  • First, it touches upon the potential delineations of core platform service under the DMA, an issue which can have important ramifications for future enforcement: delineating one core platform service from other services in the context of digital ecosystems which are often designed to be seamless could prove rather complex.
  • Second, the draft IR displays a certain tension between achieving a “rapid and effective investigatory and enforcement process” (Recital 3 IR) while also ensuring that rights of the defence of the parties to the proceedings are effectively protected. The Commission’s emphasis on speed in DMA enforcement may require some notable departures from the traditional procedural framework for antitrust.

Continue Reading Countdown to Compliance: the DMA Implementing Regulation

When its Anti-Monopoly Law (“AML”) went into effect in August 2008, China immediately became a significant antitrust enforcer on the world stage.  On June 24, 2022, the National People’s Congress, China’s top legislature, passed the Amendment to the Anti-Monopoly Law of the PRC (the “Amendment”), the first significant changes to the AML in nearly fourteen years.  The Amendment, which was signed into law by President Xi Jinping and published on June 24, will become effective on August 1.  It marks a major milestone in antitrust enforcement in China.

The more significant aspects of the Amendment include:

  • significantly enhanced penalties for AML violations, including the introduction of fines for individuals;
  • the introduction of a discretionary “stop-the-clock” mechanism for merger reviews;
  • the codification of a burden-shifting framework created by China’s courts that gives companies the opportunity to defend resale price maintenance agreements; and
  • new safe harbor and burden of proof provisions for matters involving vertical agreements.

Consistent with trends in other jurisdictions around the world, the Amendment also features a special focus on key economic sectors such as the digital economy.

Following the publication of the Amendment, the State Administration for Market Regulation (“SAMR”), China’s lead antitrust enforcement authority, released six sets of draft implementing regulations for public comment.  These cover subjects such as merger control and notification thresholds, anti-competitive agreements, abuse of a dominant market position, and the abuse of intellectual property rights to exclude or restrict competition.  SAMR is accepting comments on these regulations until July 27, 2022.

How Covington Can Help

Covington’s global antitrust and competition practice guides clients through the often-complex web of antitrust and competition laws around the world to help them secure their most important business objectives. Our team, which includes many attorneys who have served in senior leadership roles at government enforcement agencies and in in-house positions, has decades of collective experience advising clients regarding their global antitrust and competition concerns.  If you have any questions concerning the material discussed in this client alert, please contact any of the following members of our Antitrust/Competition practice: Jim O’Connell, James Marshall, and Alexander Wang.

This communication is intended to bring relevant developments to the attention of Covington & Burling LLP’s clients and other interested colleagues. It is not intended as legal advice. Readers should seek specific legal advice before acting with regard to the subjects mentioned herein. Please send an email to unsubscribe@cov.com if you do not wish to receive future emails or electronic alerts.Continue Reading Significant Changes to China’s Anti-Monopoly Law to Take Effect in August

On 24 March 2022, the European Parliament and the Council reached an agreement on the Digital Markets Act (“DMA”), a pioneering initiative to regulate digital markets and endorse the European digital strategy. The DMA would include a set of obligations for “designated gatekeepers”, namely companies whose digital services would be determined as an important gateway for businesses to reach consumers.

The DMA has been negotiated for more than a year, with discussions centering around: (i) the criteria for determining “designed gatekeepers”, (ii) content of specific obligations, and (iii) enforcement mechanisms. The final agreed text has not yet been released, but we share our understanding of the developments in these three areas.Continue Reading European Parliament and Council strike the deal on the Digital Markets Act

In his State of the Union address last week, President Biden declared that he wants to: “strengthen privacy protections, ban targeted advertising to children, and demand tech companies stop collecting personal data on our children.”  This statement comes just a couple of weeks after Senators Richard Blumenthal (D-CT) and Marsha Blackburn (R-TN) introduced the Kids Online Safety Act.  That legislation, together with the Senate Judiciary Committee’s consideration of the EARN IT Act, a bill aimed at protecting children from online sexual exploitation, gives Congress several options to focus on the internet and child safety—now with the President’s blessing.

The timing of the President’s declaration is important because the number of days available for Congress to take legislative action is shortening as the midterm elections approach.  Though Congress has already held several hearings about online platforms, particularly in the Judiciary Subcommittees with jurisdiction over antitrust, now remains an important time for stakeholders to engage in the discussion.  After the President’s address, the U.S. Senate is almost certainly laying the groundwork for what it would call a larger “tech accountability” package.Continue Reading Is the U.S. Congress Preparing a “Tech Accountability” Package?

When the UK left the EU on 31 December 2020, the Competition and Markets Authority (“CMA”) gained new powers, functions and responsibilities previously exclusively reserved to the European Commission (the “Commission”).

This blog explores how the CMA has tackled its increased workload in the first year post-Brexit, under the shadow of the global pandemic, and the extent to which the CMA’s practice has diverged from EU law.Continue Reading Trends, developments and divergence from EU law? The CMA’s first year as a global competition authority

While much of the Senate Judiciary Committee’s meeting next Thursday, February 3, will focus on the pending Supreme Court nomination, the Committee is still scheduled to mark up and vote on the Open App Markets Act (S. 2710)—which purports to address unfair competition in the app market.  This vote follows a particularly contentious markup of the American Innovation and Choice Online Act (S. 2992)—a more sweeping piece of legislation that addresses platforms self-preferencing their own goods or services.  Though that bill was voted out of Committee on a 16-6 vote (with all Democrats voting yes), concerns were raised by both parties about its scope.  Because the Open App Markets Act is a much more targeted piece of legislation, the degree to which members raise similar concerns on Thursday will be a good bellwether of the level of openness or resistance to passing any form of antitrust legislation this Congress.
Continue Reading U.S. Senate Judiciary Committee To Consider Legislation On Unfair Competition in App Market

Tuesday, January 18th, the Federal Trade Commission (“FTC”) and the U.S. Justice Department’s Antitrust Division (“DOJ”) launched a joint public inquiry regarding the agencies’ horizontal and vertical merger guidelines. As part of this inquiry, the agencies are soliciting public comment via a Request for Information (“RFI”) on a wide range of topics that could lead to significant changes in the merger guidelines and increased scrutiny of a broad array of transactions. The agencies’ inquiry will address numerous themes of the merger guidelines including those highlighted below.
Continue Reading FTC, DOJ Announce Process to Revamp Merger Guidelines