Read on Twitter
A few thoughts on the JRC expert report - https://bit.ly/3p3DllS - on the draft DMA, by @TomValletti @LuisMCabral @Haucap @g2Parker @GeorgioNomix @InfoEcon (1/17)
(See also a very good thread at https://twitter.com/frogontheroof/status/1359121929769254920 by @frogontheroof) (2/17)
Most significant suggestion is to turn Article 6 (obligations subject to further specification) into a grey list - allowing gatekeepers to argue there are legitimate efficiencies. This was one of the options initially considered by the Commission. (3/17)
They also propose some moving around of the current Article 5 and Article 6 obligations. Self-preferencing would move to Article 5 (so blacklisted) and tying and bundling would move to Article 6 (so grey listed). (4/17)
One other significant suggestion - not mentioned in the executive summary - is to extend the interoperability provisions in 6(1)(f) to cover horizontal interop - i.e. to have interoperability for substitutes/competitors and not just complements. (5/17)
I noted here - https://www.twentyfirstcenturycompetition.com/2021/02/the-eus-draft-digitall-markets-act-classifying-the-obligations/ - that the draft DMA obligations were... (6/17)
... heavily focused on protecting competition in complementary services, and less focused on promoting competition in core services. The interoperability proposal would change that balance. (7/17)
A couple of thoughts bearing in mind the telecoms regulatory environment that is in some ways comparable. (8/17)
Simplifying a bit, the telecoms rules address two distinct problems: enduring market power of the local loop because it's expensive to install and maintain, and ... (9/17)
... tippiness of communications markets because of network effects. Related but separate problems. (10/17)
For the first, telecoms companies have non-discrimination and anti-bundling obligations. Some have been structurally separated into network and services entities. Essentially protecting competition in ancillary services. (11/17)
For the second, there are interconnection obligations, ensuring any-to-any communications. Essentially promoting competition in the core telecoms service. (12/17)
So introducing an interoperability obligation between competing services would largely mirror the interconnection obligation in the telecoms regime. (13/17)
(And for similar reasons - any-to-any communications networks tend to tip towards monopoly; interoperability/interconnection ensures that society keeps the benefits of the network effect, but without the potential harm of monopoly providers.) (14/17)
On the other hand, introducing an efficiency defence into the process rather moves away from the telecoms regime which has no real equivalent. (15/17)
Indeed an efficiency defence moves the whole regulation much closer to traditional competition law analysis. Arguably a good thing - but then why have the regulation? (16/17)
One other point: if the regulatory regime is going to require balancing harms against efficiencies, it's also going to need to do an indispensability assessment. Looks a lot like competition law. (17/17)
