The award-winning study considers the role of economic expertise in the implementation of the EU Digital Markets Act (DMA). The DMA is a key European Commission instrument aimed at limiting the power of large digital platforms (“gatekeepers”) and promoting fair competitive conditions. It imposes strict obligations on the top Big Tech companies with regard to conduct. In the Act, EU legislators are consciously relying on formal legal rules and largely dispensing with conventional economic evaluation benchmarks such as market definitions or efficiency analyses.
The authors Amelia Fletcher, Jacques Cremer, Paul Heidhues, Gene Kimmelman, Giorgio Monti, Rupprecht Podszun, Monika Schnitzer, Alexandre de Streel and Fiona M. Scott Morton set out why economic expertise remains indispensable, even where regulatory provisions have been defined. Meaningful application of the DMA is only possible if economic findings – e.g. from behavioural economics research – are taken into account.
The honoured paper emphasises:
- Economics remains key to actually achieving the objectives of the DMA – market opening (contestability) and fairness. This applies in particular to the practical application and enforcement of the regulations.
- The complex characteristics of digital markets such as strong network effects, lock-in effects and asymmetrical distribution of information require an analysis of market behaviour realised with economic precision.
- The research team focuses in particular on behavioural economics mechanisms, which influence user decisions via platform design (“nudging”). These findings are key to enabling a realistic assessment of the effect of regulatory interventions.
- Without economically sound implementation, there is a risk of both over-regulation (with a negative impact on innovation) and under-regulation (with insufficient impact on competition).
The article is a product of the so-called “Yale Tobin Group”. In this group, competition experts meet regularly under the lead of the economist Fiona Scott Morton from Yale University for a transatlantic discussion of digital economics issues.
The Antitrust Writing Awards, which are presented annually and organised by Concurrences in cooperation with the George Washington University Competition Law Center, honour outstanding publications in antitrust and competition law around the world. The decision is based on academic quality, originality and practical relevance.
You can find the article here: https://academic.oup.com/jcle/article/20/1-2/1/7513584?searchresult=1
The articles published by the Yale Group can be accessed as working papers here: https://tobin.yale.edu/digital-economy/policy-discussion-papers
Academic contacts:
Professor Dr Paul Heidhues
Professor of behavioural and competition economics
Düsseldorf Institute for Competition Economics (DICE)
heidhues@dice.hhu.de
Professor Dr Rupprecht Podszun
Chair for Civil Law, German and European Competition Law
LS.podszun (at) hhu.de
