Abstract
The importance of digital platforms and related data-driven business models is ever in-creasing and poses challenges for the workability of competition in the respective markets (tendencies towards dominant platforms, paying-with-data instead of traditional money, privacy concerns, etc.). Due to such challenges, investigations of such markets are of high interest. One of recent cases is the investigation of Facebook’s data collection practices by German competition authorities. Our paper, in contrast to the wide stream of legal stud-ies on this case, aims to analyze whether Facebook’s practices regarding data collection could constitute an abuse of market power from an economic perspective, more specifi-cally against the background of modern data economics. In doing so we summarize the state of the advanced theories, including influences from behavioral economics, address-ing such markets, and discuss four potential theories of harm.
Highlights
While the application of the rules on the abuse of dominant position struggles to face some exclusionary and exploitative abuses in digital markets[1], new tools and remedies are being explored within the EU multi-level context to address abusive behaviours towards economically dependent businesses.Digitalization, data-driven innovation, and the rise of digital intermediaries are shaping “the way companies operate and do business”[2]
This article discusses whether the doctrine of abuse of economic dependence may constitute a flexible remedy to complement the application of the abuse of dominant position and face the increasing economic dependence and imbalance of bargaining power in digital markets
The article compares different ex ante regulatory options proposed at the EU level to tackle the problems arising from the “dependence” of businesses on large online platforms, followed by a discussion on the possible role of the abuse of economic dependence among the spectrum of different ex ante and ex post EU remedies and tools for behaviours of abuse of economic power in digital markets
Summary
The problem of economic dependence and imbalanced bargaining power is exacerbated in what regards large-sized online platforms because of the “level of dependency and the important scale of power imbalance”[5] Given their key role to reach consumers, the arsenal of data they hold and the sophisticated algorithms to analyse them, they may be in a position of setting rules on access and use of the platform and to unfairly exploit the economic dependence of businesses. The article moves on to compare different ex ante regulatory options proposed at the EU level in order to tackle the problems arising from the “dependence” of businesses from online platforms and discusses the possible role of abuse of economic dependence among the spectrum of different ex ante and ex post EU remedies and tools for the abuse of economic power in digital markets
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