EU antitrust regulators will now also consider digital ecosystems and the impact of free products or services on the market when investigating mergers or the market power of major technology companies, announced Margrethe Vestager, the head of the EU Competition Commission, on Thursday.
During the announcement of updated regulations that have been in effect for almost thirty years, which determine whether companies have the market power to dominate competitors or control prices, Vestager addressed criticism from lawyers and academics. It was pointed out that EU competition and merger rules are not keeping up with the times, especially concerning technological markets and companies offering free products or services in exchange for user data.
The way regulators define markets enables them to measure a company’s pricing power in the case of mergers or their ability to exclude rivals in antitrust cases and obtain concessions from these companies.
In the case of major technology firms, the European Commission will now examine multi-sided platforms and digital ecosystems, which include products related to mobile operating systems, to define a company’s market power, as well as the products and services offered for free.
The basis for determining a company’s market share can also include sales, capacity, or the number of active users or website visits according to the updated rules.
Innovations, especially the development of new products, and factors other than price, such as reliable delivery and the quality of products and services, will now be given greater consideration, which may impact the pharmaceutical industry.
Another new element is the consideration of imports and their impact on EU businesses in the assessment of EU antitrust oversight.
“To maintain competitiveness in our markets, we must appropriately regulate the environment, as competitive markets ultimately serve consumers best,” said Vestager during a press conference.
FAQ:
1. What does the update to EU competition laws entail?
The update to EU competition laws is a change to regulations that have been in effect for almost thirty years, determining whether companies have the market power to dominate competitors or control prices. The new update also includes the consideration of digital ecosystems and the impact of free products or services on the market.
2. What is the change in the way regulators define markets?
The new rules allow regulators to measure a company’s pricing power in the case of mergers or its ability to exclude rivals in antitrust cases. The European Commission will also examine multi-sided platforms and digital ecosystems to define the market power of technology firms and consider the products and services offered for free.
3. What other factors will now be considered in assessing a company’s market power?
Innovations, such as the development of new products, reliable delivery, and the quality of products and services, will now be given greater consideration when determining a company’s market power. These factors may impact the pharmaceutical industry.
4. What is the new element in the assessment of EU antitrust oversight?
The new element is the consideration of imports and their impact on EU businesses. EU antitrust regulators will now take into account the impact of imports on competition and the situation of businesses in the EU.
5. What is the aim of the update to EU competition laws?
The aim of the update is to maintain competitiveness in the markets through appropriate regulations that serve consumers best.
Definitions:
– Pricing power: a company’s ability to control and manipulate the prices of its products or services in the market.
– Antitrust cases: investigations conducted by regulators to prevent monopolistic practices and behaviors that restrict competition.
– Multi-sided platforms: systems in which different groups of stakeholders benefit from services offered by a particular company.
– Digital ecosystems: complex networks of connections between different digital products and services that complement each other.
Suggested links:
– European Commission – Press Corner
– European Parliament
The source of the article is from the blog zaman.co.at