Brussels (Brussels Morning) The European Commission should step up efforts to improve against enforcement challenges in digital markets, a report by the European Court of Auditors (ECA) said today.
The advice is likely targeted at filling the gaps in Commission plans to regulate digital platforms – the so-called Digital Services Act (DSA) – to be made public on 2 December.
Online platforms are still governed by the EU’s e-Commerce directive, which came out in 2000 whereas the DSA is set to address distortions created through the economy of highly centralised platforms over the last 20 years.
The current legal framework builds on online platforms’ self-regulation and to some extent on EU countries’ national legislation, an approach that has proven to lead to anti-competition and the creation of monopolies.
In the ECA report, the EU auditors found that the Commission has “limited capacity to monitor markets, proactively detect antitrust infringements and check the accuracy of merger information”, a challenge that needs urgent addressing in view of a world dominated by globalisation.
When it comes to merger control, the Commission faces added challenges as the volume of data for verification and mergers needing analysis is constantly increasing.
The EU auditors also assessed that despite the Commission taking all merger decisions in due time, its antitrust proceedings remain lengthy — up to eight years — which can reduce the effectiveness of its enforcement decisions.
Apple is a case in point
In September, Competition Commissioner Margrethe Vestager appealed to the EU Court of Justice to overturn an EU General Court ruling that the Apple Corporation had not benefited from illegal tax breaks in Ireland from 2003 to 2014. This legal battle is likely to take years to reach a conclusion.
The EU accountants also highlighted that the Commission imposed its largest fines yet, but they had never evaluated their deterrent effect. Such is the case of EU battles against tech giants like Google, Amazon or Apple, which have been defying Commissioner Vestager with their anti-competition business models.
“In the last decade, the Commission has been using its powers in merger control and antitrust proceedings effectively”, said ECA’s Alex Brenninkmeijer, responsible for the report.
“But it now needs to scale up market oversight to be fit for a more global and digital world. It needs to get better at proactively detecting infringements and select its investigations more judiciously. Together with stronger cooperation from National Competent Authorities (NCAs), this will result in better competition enforcement in the EU internal market, protecting businesses and consumers”, added Brenninkmeijer.
Overall, EU auditors recommended the EU executive improve its capacity to proactively detect infringements, render its competition enforcement more effective, improve coordination with NCAs through the European Competition Network, and report better on its own performance.
“The EU commission should be making as much effort to nurture new ways of building the future as to regulating what already exists”, wrote John Thornhill for the Financial Times.
“Bash Big Tech by all means. But to make Europe truly fit for the digital age, Ms. Vestager needs to be as inventive as she is defiant”.