The New Competition Tool : A primer

On June 2, 2020, the Commission published two public consultations on a potential New Competition Tool (NCT) and a potential ex-ante asymmetric regulation against large online platforms (DSA). The NCT is a market investigation instrument to deal with structural competition problems. The DSA is a regulation that governs the behavior of large online platforms with a list of interdictions and obligations. Both tools will be merged into a single legislative framework, the Digital Markets Act (DMA). The legislative proposal is expected to be published on December 9, 2020. However, it is already possible to get insights on the NCT as the Commission has released the outcome of the public consultation (but not yet about the DSA). Is a New Competition Tool necessary? And if yes, how?

This short opinion summarizes my research paper published today on this topic. The paper answers these questions by analyzing the data concerning the policy options (section I) and institutional set-up (section 2).

I-Analysis of the policy options

The public consultation gathered 188 responses from a variety of stakeholders (figure 1). In the detail, 45% are an association or organization representing businesses (36%), consumers (3%) and civil society (6%). 29% are a business/ economic operator of small size (2%), medium size (4%), and large size (23%). 5% are a public authority. 6% are academia from law (5%) and from economics (1%). 4% are an individual citizen. 3% are a research institution/ Think Tank. 2% are a law firm/ consultancy. 6% are others. From this panel, one can observe that academia is underrepresented, whereas the number of research papers and conferences on digital competition are significant.

Respondents welcome the New Competition Tool (NCT) to deal with and prevent structural competition problems (figure 1). The NCT should apply to all firms in all markets/sectors affected or not by digitization. The Commission should be able to make recommendations and impose remedies, including structural, hybrid and non-structural ones. One question remains: how the NCT should be implemented?

II-Analysis of the institutional set-up

Respondents largely welcome the institutional set-up proposed by the Commission. The authority should have proper investigation powers and a clear framework. (figures 2 and 3). This is not surprising as the Commission seems to follow the CMA’s Market Investigation Tool.[1]

[1] Fletcher, A., Market Investigations for Digital Platforms: Panacea or Complement?, 6 August 2020.


Thank you for your subscription!