The Digital Markets Act: Ex Ante Regulation of Digital Gatekeepers to Promote
Contestability in Digital Markets
At a glance summary
• Competition law has failed
to address issues in relation to dominant digital gatekeeper
• On the possible legislative options outlined by the Commission, we support a dynamic
ex ante framework based on a case-by-case assessment and application of tailored
• This should apply to digital gatekeepers, present in 3 or more Member States.
• Remedies imposed on digital gatekeepers should be targeted
and could include:
• Requirements to provide information to relevant authorities
• Prohibition of unfair commercial terms and conditions and anticompetitive
• Access to certain key facilities (software/hardware, APIs) which are critical to
• Access to data
• Structural separation
The European Commission in its Digital Strategy recognises that certain “platforms have acquired
significant scale, which effectively allows them to act as private gatekeepers to markets,
customers and information” and goes on to state that “we must ensure that the systemic role of
certain online platforms and the market power they acquire will not put in danger the fairness and
openness of our markets”.
Achieving fairness, contestability and competitiveness within digital markets has never been more
important. Digital adoption will play a key part in our recovery from the Coronavirus pandemic, but
this must be done in a way that allows European small businesses to thrive, and does not result in
further concentration market power in the hands of a few small digital gatekeepers. Instead, we
need a positive regulatory agenda, which imprints EU values and norms on the conduct of large
digital gatekeepers, establishing some clear boundaries around what commercial behaviours are
permissible, and those that are not. We need clear metrics to establish when such rules should
apply and to whom and we need coordinated and harmonised monitoring and enforcement
powers across the EU to ensure the integrity of the single market.
As one of the few pan-European operators built on the single market project we are strong
supporters of harmonisation and strong enforcement of European rules. We firmly believe that a
well-functioning Single Market is the foundation of Europe’s digital autonomy. For this reason we
welcome the proposed ex ante regulatory regime for Digital Gatekeepers outlined in the public
consultation and Roadmap Inception Impact Assessment, and have submitted some detailed
proposals on how such a regime could be constituted and enforced.
Our starting position is that the time is right for a targeted and robust model of intervention.
Concerns have arisen about the ability of ex post competition law enforcement to address issues
in relation to dominant digital gatekeeper platforms, in particular when defining digital markets
and dominance and assessing certain types of conduct in relation to data funded, multi sided
markets. In addition, competition law enforcement often takes too long, meaning that irreversible
foreclosure has taken place before any remedies are implemented. Remedies also tend to be
specific to individual cases and difficult to apply more generally. We believe that EU should take
the lead in addressing the regulatory challenges of digital markets and that competition law and
ex ante regulation both need to evolve to address these challenges.
The Problem Statement and Markets in Scope
There are two particular challenges that we have identified in relation to digital gatekeepers: (i)
lack of choice/lock-in for our customers; and (ii) a lack of access and entry to markets and
unreasonable conditions attached to access. These issues arise in markets where there exists a
digital gatekeeper that acts as an unavoidable trading partner and is able to leverage its systemic
position to artificially supress competition and to further entrench its dominance. These
characteristics are present in a number of the digital markets identified above, including but not
limited to online search, intermediation platforms (eCommerce), social media platforms,
operating systems and app stores.
For European consumers, detrimental impacts occur through the restriction of their choices of
products and services available to them. We see our customers increasingly locked into digital
ecosystems, rarely switching between apps stores or operating systems (and therefore devices),
while providing ever-increasing amounts of personal data that further ties these customers into an
ecosystem. This trend is likely to be exacerbated in the future by the limited choice in voice
assistants, which in turn only provide one or two options for consumers, leading to the growth of
closed ecosystems (for example in relation to home hub devices) and the limited use of new data
portability rights. As alternatives dwindle, this is leading to a lack of choice for consumers. In
particular we believe that a number of markets need fall within scope of the ex ante regulation for
it to be effective:
1. online intermediation services (i.e. market places, app stores and social networks)
2. online search engines
3. operating systems
4. cloud services
Defining Digital Gatekeepers
In the context of digital platforms, the “digital gatekeeper” concept is associated with the
gatekeeper having a privileged relationship with a customer (which may be an end consumer)
which is critical in directing the customer’s access to services or apps, while at the same time
allowing that provider to take advantage of the consumer’s frequency of use of its digital platform
so as to tailor ever more sophisticated and varied services to that customer. In this sense, the larger
the network effects generated by the gatekeeper, the more difficult it is for consumers to avoid
dealing with them.”
Vodafone considers that a range of criteria should apply with equal force in relation to the
proposed new ex ante regulatory tool to address online digital gatekeepers. These criteria should
encompass the following:
a non-contestable and concentrated market structure should be identified;
the digital gatekeeper in question is an unavoidable trading partner; and
the application of competition rules would be ineffective in addressing the identified
market failures arising from the exercise of the gatekeeping function.
Such an approach would ensure both proportionality and a high burden of proof, and a swift
regulatory solution in case competition law is inadequate to address systemic market failures.
Impact on industry and consumers in Europe
The European Commission has the ambition to create an economy that works for people. A central
plank in this agenda is to support and strengthen SMEs across Europe and do so by ensuring
fairness in competition between businesses of all sizes and different geographies. In the digital
economy, the emergence of digital gatekeepers has created barriers for European start-ups and
SMEs, which are looking to innovate and scale-up their products and services.
There are two particular challenges which we have identified: lack of choice/lock in for consumers
and lack of access and entry to markets.
For European consumers there are detrimental impacts through a restriction in choice of products
and services. We see our customers locked into digital ecosystems, rarely switching between apps
stores or operating systems, providing ever increasing amounts of personal data which further ties
customers into an ecosystem. This is likely to be exacerbated in the future by the limited choice
of voice assistants which in turn only provide one or two options for consumers, growth of closed
ecosystems (for example in relation to home hub devices) and the limited use of the new data
portability rights. This is leading to a lack of choice for consumers, as alternatives dwindle.
Closed ecosystems also prevent innovative new services emerging which affects companies of all
sizes and is particularly harmful to smaller European companies. For example, the consumer and
competition authority in the Netherlands has recently stated that where popular online platforms
or devices refuse access to competing payment services, or make it difficult for competitors to
function on their platform or device, it hampers competition and thus further innovation:
"Big Tech companies can play a driving role in competition and therefore innovation in the Dutch
payment market. But it does require the Big Tech companies to open up their platforms and
devices to competing payment services. Just like the banks have to do," ACM chairman Martijn
Snoep said. "Only in such a level playing field will payment services continue to compete and
innovate and will consumers remain free to choose. It would be good that before the market is
dominated by one or a few major players, European rules on this point are tightened."
The same point applies to other areas, such as voice assistants and identity. A more open
environment going forward will enable Europe to accelerate out of the current crisis and develop
a strong foundation for all businesses to thrive.
The types of harms generated by digital platforms are varied and therefore the remedies need to
be varied and sufficiently flexible to be able to address the particular concerns raised by certain
problematic practices. Remedies must be tailored to address the specific issues arising. In extreme
situations, or where it is felt that leveraging into neighbouring, adjacent or ancillary markets is
likely to be abusive, the option of structural separation might be necessary.
Possible behavioural and structural remedies available to competent regulatory authorities could
1. Prohibition of some harmful and anti-competitive conduct such as:
a. restrictions on content/service interoperability (e.g., allowing multiple app
platforms onto an Operating System and the possibility to provide services in
different Operating Systems);
b. bundling/tying with ‘must have’ services and apps where this is capable of leading
to anti-competitive foreclosure;
c. predatory pricing;
d. unfair terms and conditions in contracts based on unequal bargaining power.
2. Access to key assets and innovation capabilities such as non-rivalrous data, certain key
facilities (software/hardware, APIs) which are critical to compete, and the provision of
sufficient advance notice to competitors of changes in the configuration of the digital
platform or ecosystem’s services and protocols. This can also be encouraged through
3. Separation (accounting, functional, structural) where justified in very exceptional cases,
i.e., where there has been a persistent failure to achieve effective non-discrimination and
where it is unlikely that fair competition would be achieved, even after recourse to other
In our view, it would be inadvisable to define a closed list of remedies that comprehensively
address all the competition problems in the digital sphere. As issues arise, remedies will have to be
designed, tested, and adjusted by competent authorities in an iterative process. In the alternative,
a widely drawn list of potential remedies could be drawn up, within which there could exist
sufficient flexibility for the tailoring of those remedies to address particular competition problems.
This could occur through the regular issuance of guidance by the Commission, much the same as
in the manner practiced in the EU through the adoption of guidelines or recommendations under
the existing electronic communications regulatory regime. The regime should consider the active
participation of industry stakeholders in the creation of remedies, along with the possibility that
appropriate regulatory bodies could adapt existing measures over their lifetime where they are
shown to be ineffective and even act as dispute settlement bodies in the event that the scope of
remedies is challenged or proves to be problematic in practice.
The approach to remedies can be implemented in a range of ways. Again, this can take a “light
touch” approach (such as Codes of Conduct or voluntary commitments) through to mandatory
requirements. It is important to recognise that there can be no “one-size-fits-all” solution given
the different dynamics displayed by the different types of digital platform. For example, not all
gatekeeping concerns in the online economy could or should be resolved via mandatory access
to data obligations. In some cases, the anti-competitive actions of digital gatekeepers may derive
from undue self-preferencing practices and the leveraging of the control of the platform
ecosystem to provide an unfair advantage to the platform’s own vertical services.
Oversight and Enforcement
Supervision and enforcement of rules for online gatekeepers should be carried out at EU level.
Large online platforms operate in global ecosystems and competition concerns arising in digital
markets have an important cross-border dimension. Nevertheless, the effects of platforms’
abusive conducts may differ across Member States, especially given the different linguistic and
demographic traditions that exist across the EU Member States. Accordingly, coordination
between an institution operating at the pan-European level and national competent authorities is
likely to be important.
We would therefore welcome an adequately resourced EU level body to be primarily responsible
to enforce dedicated rules for large online platforms acting as gatekeepers, in close coordination
with national competent authorities. The EU level authority would also coordinate and advise
national competent authorities with a view to ensuring the harmonised enforcement of rules.
Where a single Decision is made affecting the Single Market, a single right of appeal at an EU level
should be provided. Centralising appeals at European level would be the ideal scenario, as the
appeals system in the electronic communications sector has given rise to conflicting approaches
being taken under those national appeals procedures. One can also envisage a role to be played
by the equivalent pan-European gatherings of competition regulators (the ECN) or sector-specific
electronic communications regulators (BEREC). These pan-European bodies would be able to act
in their own right or as institutional intermediaries for their national member authorities.
The combination of (coordinated) national and European regulatory oversight should be achieved
on the basis of the principles of maximum harmonisation and respect for subsidiarity. We envisage
a number of alternative institutional models being considered fit for purpose, although the
cost/benefit analysis for the ideal federal/national combination of competences will no doubt
differ depending on the threshold test deployed for intervention, the nature of the analysis to be
conducted and the nature of the remedies to be adopted.