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European Union Revises Antitrust Regulations for Big Tech

 |  February 11, 2024

European Union antitrust regulators have announced a significant overhaul of the Market Definition Notice, a set of rules in place for nearly three decades, aimed at modernizing the assessment of market power, particularly concerning Big Tech companies and their digital ecosystems.

The move comes as regulators grapple with the rapidly evolving landscape of technology markets, where concerns over the dominance of major players and the influence of digital ecosystems have been growing. The updated rules will not only consider traditional metrics of market dominance and merger deals but also focus on the impact of companies’ digital ecosystems and the provision of free products or services.

Critics have long argued that the existing antitrust framework has failed to keep pace with the complexities of the digital economy, particularly in regulating companies that offer free services in exchange for user data. Legal experts and academics have highlighted the inadequacy of current laws in addressing the unique challenges posed by Big Tech firms.

Under the revised rules, regulators will scrutinize multi-sided platforms and digital ecosystems, such as those centered around mobile operating systems, to assess the market power of companies. The provision of free products and services will now be factored into determining market share, with metrics including sales, capacity, or the number of active users or website visits.

Related: US Tech Giants Accept European Union’s ‘Gatekeeper’ Classification

Moreover, the updated framework will broaden the focus beyond pricing, considering factors such as innovation, product development, and the quality of goods and services. This shift in approach is expected to have implications beyond the tech sector, potentially impacting industries like pharmaceuticals.

A notable aspect of the updated rules is the emphasis on assessing the impact of imports on EU businesses, reflecting a broader approach to evaluating market competitiveness. European Union officials stressed the importance of maintaining competitive markets to effectively serve consumers, underscoring the need for an appropriate regulatory framework to achieve this objective.

The announcement marks a significant step towards addressing the challenges posed by the growing influence of Big Tech companies and their digital ecosystems. By updating the antitrust rules to reflect the realities of the digital economy, EU regulators aim to ensure fair competition and protect consumers in an increasingly interconnected and technology-driven world.

Source: The Paypers