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ACM is favourable to European Commission’s proposals regarding new rules for the online economy

10-09-2020

The Netherlands Authority for Consumers and Markets (ACM) has responded to two public consultations of the European Commission. In its response, ACM has indicated it is in favour of clarifying the responsibilities of large, digital platforms, as well as strengthening the rights of consumers. In addition, ACM supports the proposal regarding additional tools that will give the ability to act against major online platforms in an early stage in order to prevent anticompetitive problems. Also, ACM is positive to having more options to protect consumers in the online economy.

The European Commission (EC) has launched these two consultations in the run-up to the introduction of new regulations in order to improve competition in the digital economy, and, at the same time, to protect consumers. The first step in this process was the EC’s publication of public questionnaires about a new “Digital Services Act” (DSA) and about a potential, new instrument, called the “New Competition Tool” (NCT). The EC seeks to impose additional rules on big digital platforms, and, in that way, make it possible to take action faster and sooner. One of ACM’s wishes is that new ex-ante rules (meaning rules that apply in advance) can be set for powerful platforms, and that the rights of consumers are better guaranteed by all platforms. In addition, ACM has indicated it is favourable to the introduction of the NCT. In addition to the existing rules, this instrument will grant the ability to solve and prevent structural anticompetitive problems. The EC is expected to put forward legislative proposals by the end of 2020.

More and more interactions between retailers and consumers (as well as among consumers themselves) have moved from analog to digital. The role that digital platforms, such as online marketplaces, play in that process offers many benefits, but it also causes concerns about, for example, competition as well as concerns about protecting consumers and small businesses in an effective manner. The digital economy is one of the key priorities on ACM’s Agenda, and the experience that has been gained thus far forms the basis for ACM’s contributions to the consultations.

Ex-ante rules

Together with the Belgian and Luxembourgish regulators, ACM has already argued before that regulatory options to take action in advance against major digital platforms before irreparable damage has been inflicted on the market can help towards effective oversight. The ideas for rules applying to major platforms included in both the DSA and the NCT are practical interpretations of those wishes. ACM is therefore positive to these instruments, and, in its opinion, emphasizes that it is crucial that the instrument makes it possible to introduce measures quickly against large, digital platforms that cause structural problems. Considering the great diversity in digital platforms, it is important to be able to impose specific measures in each individual case. This ability should also be given to national regulators that oversee national markets if specific problems occur on those markets.

In its responses to the consultations, ACM describes several situations where the existing antitrust toolkit may not be sufficient. For example, these include situations where platforms act as gatekeepers or if market dynamics are inclined to a ‘winner-takes-all’ mentality. In those situations, a new toolkit (one that allows fast interventions in advance) would be a solution. The requirements that could be imposed should not be punitive in nature, but should be aimed at changing the market structure or at preventing certain types of behaviour. Digital platforms with gatekeeping roles must be identified quickly, and should comply with general requirements such as non-discrimination and transparency. On top of that, specific requirements such as access requirements can be imposed, if necessary.

Consumer protection

The DSA also offers the chance to strike the right balance between consumers, digital-platform operators, and sellers. In that context, ACM finds the following important:

  1. Making explicit and clarifying what responsibilities of online marketplaces and other providers of digital services have that are an integral part of the promotion, realization, and execution of online transactions, for example by mandating operators of online marketplaces to perform sufficient checks with regard to the traders that offer products to consumers on their platforms.
  2. The introduction of measures that ensure transparency as well as the provision of information that is useful, consistent and effective for consumers, for example, by mandating providers to demonstrate that the required information is understood by consumers and that it is taken into consideration in their decision-making processes regarding transactions.
  3. The ability to take measures vis-à-vis powerful digital platforms against the exploitation of the unequal position of consumers and small businesses on those platforms. For example, certain provisions in general terms and conditions that those platforms use could be unreasonable for consumers.

ACM’s contributions to the consultations 

ACM has contributed to the consultations in different ways: directly with a response to the e-commerce elements of the DSA consultation and the NCT consultation, and also indirectly through BEREC’s response, which is the European network of telecom regulators, of which ACM is a member.