Tracking Tech Giants: An Overview of Antitrust Engagements in the Digital Domain

The reasons why large digital technology firms sometimes cause concerns about unfair competition, and a summary of EU and UK investigations and litigation in response to those concerns

By Stephen Critchley, Agnieszka Szewczyk and Helena Lindgren

The European Commission has long talked of the need to regulate the behaviour of large digital technology companies, and to harmonise these regulations between Member States. In a July 2020 statement, Margrethe Vestager, the EU Competition Commissioner said that “when big companies abuse their power, they can very quickly push markets beyond the tipping point, where competition turns to monopoly”.

This article (the first in a series) explains various characteristics of digital markets that can sometimes lead to competitive concerns, and lists consequent regulatory and court actions. Later instalments in the series will take a deeper dive into some of those actions, and explain new EU legislation aimed at ex ante prevention of anticompetitive conduct (the Digital Markets Act).

Competitive issues in digital markets

Online marketplaces, search engines and social media have become an integral part of everyday life. The main providers of the digital platforms for these services, such as Amazon, Google and Meta (Facebook), are assisted by “network effects” – i.e., the more consumers, merchants, and content providers use a service, the better it becomes for all users. Leading firms can therefore acquire an ever-increasing mass and gravitational pull, which can make it hard for competitors to enter the market or grow their market share.

The competitive landscape may also be shaped by the high cost of investment necessary for such services to remain state-of-the-art. Competition regulators have become increasingly concerned that such factors have led to substantial barriers to entry into digital markets.

Digital platforms typically offer “intermediation” services – i.e., rather than offering a product to the consumer, they offer a platform on which others provide it – although they may use the platform to offer their own products too. Google, for example, started out as a platform for internet searches, and later offered its own products in tabs next to the “natural search” results. Amazon did the opposite. It started out as a retailer, and then became a platform for itself and other retailers.

Achieving scale is not unlawful, even when cemented by network effects. However, the abuse of that position might be. European regulators have focused on major platform providers when they have allegedly engaged in the following practices:

• Managing their platforms in a way that prefers their own products to those of their competitors;
• Exploiting for competitive advantage the data that they harvest through their platforms;
• Limiting interoperability with other platforms; and
• Imposing tying, bundling, pre-installation, default-setting and prominence requirements on the makers of devices used to access their (and their competitors’) platforms.

EU and UK investigations and litigation

In the past few years, allegations of such conduct have led to a constant stream of cases before EU and UK courts and regulators. The main cases are as follows.

Written by Stephen Critchley and Agnieszka Szewczyk

Edited by Gary J. Malone