Chapter IV - Market investigation (Art. 16-19) - Digital Decade by Hannes Snellman

Chapter IV – Market investigation (Art. 16-19)

Art. 16 DMA - Opening of a market investigation arrow_right_alt

When the Commission intends to carry out a market investigation with a view to the possible adoption of decisions pursuant to Articles 17, 18 and 19 it shall adopt a decision opening a market investigation.
Notwithstanding paragraph 1, the Commission may exercise its investigative powers under this Regulation before opening a market investigation pursuant to that paragraph.
The decision referred to in paragraph 1 shall specify:
1. the date of opening of the market investigation;
2. the description of the issue to which the market investigation relates to;
3. the purpose of the market investigation.
The Commission may reopen a market investigation that it has closed where:
1. there has been a material change in any of the facts on which a decision adopted pursuant to Article 17, 18 or 19 was based; or
2. the decision adopted pursuant to Article 17, 18 or 19 was based on incomplete, incorrect or misleading information.
The Commission may ask one or more national competent authorities to assist it in its market investigation.

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Recital 73

In order to ensure the full and lasting achievement of the objectives of this Regulation, the Commission should be able to assess whether an undertaking providing core platform services should be designated as a gatekeeper without meeting the quantitative thresholds laid down in this Regulation; whether systematic non-compliance by a gatekeeper warrants imposing additional remedies; whether more services within the digital sector should be added to the list of core platform services; and whether additional practices that are similarly unfair and limiting the contestability of digital markets need to be investigated. Such assessment should be based on market investigations to be carried out in an appropriate timeframe, by using clear procedures and deadlines, in order to support the ex ante effect of this Regulation on contestability and fairness in the digital sector, and to provide the requisite degree of legal certainty.

Art. 17 DMA - Market investigation for designating gatekeepers arrow_right_alt

The Commission may conduct a market investigation for the purpose of examining whether an undertaking providing core platform services should be designated as a gatekeeper pursuant to Article 3(8), or in order to identify the core platform services to be listed in the designation decision pursuant to Article 3(9). The Commission shall endeavour to conclude its market investigation within 12 months from the date referred to in Article 16(3), point (a), In order to conclude its market investigation, the Commission shall adopt an implementing act setting out its decision. That implementing act shall be adopted in accordance with the advisory procedure referred to in Article 50(2).
In the course of a market investigation pursuant to paragraph 1 of this Article, the Commission shall endeavour to communicate its preliminary findings to the undertaking providing core platform services concerned within 6 months from the date referred to in Article 16(3), point (a). In the preliminary findings, the Commission shall explain whether it considers, on a provisional basis, that it is appropriate for that undertaking to be designated as a gatekeeper pursuant to Article 3(8), and for the relevant core platform services to be listed pursuant to Article 3(9).
Where the undertaking providing core platform services satisfies the thresholds set out in Article 3(2), but has presented sufficiently substantiated arguments in accordance with Article 3(5) that have manifestly called into question the presumption in Article 3(2), the Commission shall endeavour to conclude the market investigation within 5 months from the date referred to in Article 16(3), point (a).

In such a case, the Commission shall endeavour to communicate its preliminary findings pursuant to paragraph 2 of this Article to the undertaking concerned within 3 months from the date referred to in Article 16(3), point (a).

When the Commission, pursuant to Article 3(8), designates as a gatekeeper an undertaking providing core platform services that does not yet enjoy an entrenched and durable position in its operations, but which will foreseeably enjoy such a position in the near future, it may declare applicable to that gatekeeper only one or more of the obligations laid down in Article 5(3) to (6) and Article 6(4), (7), (9), (10) and (13), as specified in the designation decision. The Commission shall only declare applicable those obligations that are appropriate and necessary to prevent the gatekeeper concerned from achieving, by unfair means, an entrenched and durable position in its operations. The Commission shall review such a designation in accordance with the procedure laid down in Article 4.

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Recital 23

An undertaking providing core platform services should be able, in exceptional circumstances, to rebut the presumption that the undertaking has a significant impact on the internal market by demonstrating that, although it meets the quantitative thresholds set out in this Regulation, it does not fulfil the requirements for designation as a gatekeeper. The burden of adducing evidence that the presumption deriving from the fulfilment of the quantitative thresholds should not apply should be borne by that undertaking. In its assessment of the evidence and arguments produced, the Commission should take into account only those elements which directly relate to the quantitative criteria, namely the impact of the undertaking providing core platform services on the internal market beyond revenue or market cap, such as its size in absolute terms, and the number of Member States in which it is present; by how much the actual business user and end user numbers exceed the thresholds and the importance of the undertaking’s core platform service considering the overall scale of activities of the respective core platform service; and the number of years for which the thresholds have been met.

Provision should also be made for the assessment of the gatekeeper role of undertakings providing core platform services which do not satisfy all of the quantitative thresholds, in light of the overall objective requirements that they have a significant impact on the internal market, act as an important gateway for business users to reach end users and benefit from an entrenched and durable position in their operations or it is foreseeable that they will do so in the near future. When the undertaking providing core platform services is a medium-sized, small or micro enterprise, the assessment should carefully take into account whether such an undertaking would be able to substantially undermine the contestability of the core platform services, since this Regulation primarily targets large undertakings with considerable economic power rather than medium-sized, small or micro enterprises.

Recital 24

Recital 25

Such an assessment can only be done in light of a market investigation, while taking into account the quantitative thresholds. In its assessment the Commission should pursue the objectives of preserving and fostering innovation and the quality of digital products and services, the degree to which prices are fair and competitive, and the degree to which quality or choice for business users and for end users is or remains high. Elements can be taken into account that are specific to the undertakings providing core platform services concerned, such as extreme scale or scope economies, very strong network effects, data-driven advantages, an ability to connect many business users with many end users through the multisidedness of those services, lock-in effects, lack of multi-homing, conglomerate corporate structure or vertical integration. In addition, a very high market capitalisation, a very high ratio of equity value over profit or a very high turnover derived from end users of a single core platform service can be used as indicators of the leveraging potential of such undertakings and of the tipping of the market in their favour. Together with market capitalisation, high relative growth rates are examples of dynamic parameters that are particularly relevant to identifying such undertakings providing core platform services for which it is foreseeable that they will become entrenched and durable. The Commission should be able to take a decision by drawing adverse inferences from facts available where the undertaking providing core platform services significantly obstructs the investigation by failing to comply with the investigative measures taken by the Commission.

Recital 73

Recital 74

The Commission should be able to find, following a market investigation, that an undertaking providing a core platform service fulfils all of the overarching qualitative criteria for being identified as a gatekeeper. That undertaking should then, in principle, comply with all of the relevant obligations laid down by this Regulation. However, for gatekeepers that have been designated by the Commission because it is foreseeable that they will enjoy an entrenched and durable position in the near future, the Commission should only impose those obligations that are necessary and appropriate to prevent that the gatekeeper concerned achieves an entrenched and durable position in its operations. With respect to such emerging gatekeepers, the Commission should take into account that this status is in principle of a temporary nature, and it should therefore be decided at a given moment whether such an undertaking providing core platform services should be subjected to the full set of gatekeeper obligations because it has acquired an entrenched and durable position, or the conditions for designation are ultimately not met and therefore all previously imposed obligations should be waived.

Art. 18 DMA - Market investigation into systematic non-compliance arrow_right_alt

The Commission may conduct a market investigation for the purpose of examining whether a gatekeeper has engaged in systematic non-compliance. The Commission shall conclude that market investigation within 12 months from the date referred to in Article 16(3), point (a). Where the market investigation shows that a gatekeeper has systematically infringed one or more of the obligations laid down in Article 5, 6 or 7 and has maintained, strengthened or extended its gatekeeper position in relation to the requirements set out in Article 3(1), the Commission may adopt an implementing act imposing on such gatekeeper any behavioural or structural remedies which are proportionate and necessary to ensure effective compliance with this Regulation. That implementing act shall be adopted in accordance with the advisory procedure referred to in Article 50(2).
The remedy imposed in accordance with paragraph 1 of this Article may include, to the extent that such remedy is proportionate and necessary in order to maintain or restore fairness and contestability as affected by the systematic non-compliance, the prohibition, during a limited period, for the gatekeeper to enter into a concentration within the meaning of Article 3 of Regulation (EC) No 139/2004 regarding the core platform services or the other services provided in the digital sector or enabling the collection of data that are affected by the systematic non-compliance.
A gatekeeper shall be deemed to have engaged in systematic non-compliance with the obligations laid down in Articles 5, 6 and 7, where the Commission has issued at least three non-compliance decisions pursuant to Article 29 against a gatekeeper in relation to any of its core platform services within a period of 8 years prior to the adoption of the decision opening a market investigation in view of the possible adoption of a decision pursuant to this Article.
The Commission shall communicate its preliminary findings to the gatekeeper concerned within 6 months from the date referred to in Article 16(3), point (a). In its preliminary findings, the Commission shall explain whether it preliminarily considers that the conditions of paragraph 1 of this Article are met and which remedy or remedies it preliminarily considers necessary and proportionate.
In order to enable interested third parties to effectively provide comments, the Commission shall, at the same time as communicating its preliminary findings to the gatekeeper pursuant to paragraph 4 or as soon as possible thereafter, publish a non-confidential summary of the case and the remedies that it is considering imposing. The Commission shall specify a reasonable timeframe within which such comments are to be provided.
Where the Commission intends to adopt a decision pursuant to paragraph 1 of this Article by making commitments offered by the gatekeeper pursuant to Article 25 binding, it shall publish a non-confidential summary of the case and the main content of the commitments. Interested third parties may submit their comments within a reasonable timeframe which shall be set by the Commission.
In the course of the market investigation, the Commission may extend its duration where such extension is justified on objective grounds and proportionate. The extension may apply to the deadline by which the Commission has to issue its preliminary findings, or to the deadline for adoption of the final decision. The total duration of any extension or extensions pursuant to this paragraph shall not exceed 6 months.
In order to ensure effective compliance by the gatekeeper with its obligations laid down in Articles 5, 6 and 7, the Commission shall regularly review the remedies that it imposes in accordance with paragraphs 1 and 2 of this Article. The Commission shall be entitled to modify those remedies if, following a new market investigation, it finds that they are not effective.

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Recital 73

Recital 75

The Commission should investigate and assess whether additional behavioural, or, where appropriate, structural remedies are justified, in order to ensure that the gatekeeper cannot frustrate the objectives of this Regulation by systematic non-compliance with one or several of the obligations laid down in this Regulation. This is the case where the Commission has issued against a gatekeeper at least three non-compliance decisions within the period of 8 years, which can concern different core platform services and different obligations laid down in this Regulation, and if the gatekeeper has maintained, extended or further strengthened its impact in the internal market, the economic dependency of its business users and end users on the gatekeeper’s core platform services or the entrenchment of its position. A gatekeeper should be deemed to have maintained, extended or strengthened its gatekeeper position where, despite the enforcement actions taken by the Commission, that gatekeeper still holds or has further consolidated or entrenched its importance as a gateway for business users to reach end users.

The Commission should in such cases have the power to impose any remedy, whether behavioural or structural, having due regard to the principle of proportionality. In this context, the Commission should have the power to prohibit, to the extent that such remedy is proportionate and necessary in order to maintain or restore fairness and contestability as affected by the systematic non-compliance, during a limited time-period, the gatekeeper from entering into a concentration regarding those core platform services or the other services provided in the digital sector or services enabling the collection of data that are affected by the systematic non-compliance. In order to enable effective involvement of third parties and the possibility to test remedies before its application, the Commission should publish a detailed non-confidential summary of the case and the measures to be taken. The Commission should be able to reopen proceedings, including where the specified remedies turn out not to be effective. A reopening due to ineffective remedies adopted by decision should enable the Commission to amend the remedies prospectively. The Commission should also be able to set a reasonable time period within which it should be possible to reopen the proceedings if the remedies prove not to be effective.

Recital 89

When preparing non-confidential summaries for publication in order to effectively enable interested third parties to provide comments, the Commission should give due regard to the legitimate interest of undertakings in the protection of their business secrets and other confidential information.

Art. 19 DMA - Market investigation into new services and new practices arrow_right_alt

The Commission may conduct a market investigation for the purpose of examining whether one or more services within the digital sector should be added to the list of core platform services laid down in Article 2, point (2) or for the purpose of detecting practices that limit the contestability of core platform services or that are unfair and which are not effectively addressed by this Regulation. In its assessment, the Commission shall take into account any relevant findings of proceedings under Articles 101 and 102 TFEU concerning digital markets as well as any other relevant developments.
The Commission may, when conducting a market investigation pursuant to paragraph 1, consult third parties, including business users and end users of services within the digital sector that are being investigated and business users and end users who are subject to practices under investigation.
The Commission shall publish its findings in a report within 18 months from the date referred to in Article 16(3), point (a).

That report shall be submitted to the European Parliament and to the Council and, where appropriate, shall be accompanied by:

1. a legislative proposal to amend this Regulation in order to include additional services within the digital sector in the list of core platform services laid down in Article 2, point (2), or to include new obligations in Chapter III; or
2. a draft delegated act supplementing this Regulation with regard to the obligations laid down in Articles 5 and 6, or a draft delegated act amending or supplementing this Regulation with regard to the obligations laid down in Article 7, as provided for in Article 12.

Where appropriate, the legislative proposal to amend this Regulation under point (a) of the second subparagraph may also propose to remove existing services from the list of core platform services laid down in Article 2, point (2), or to remove existing obligations from Article 5, 6 or 7.

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Recital 73

Recital 78

With regard to conduct by gatekeepers that is not covered by the obligations set out in this Regulation, the Commission should have the possibility to open a market investigation into new services and new practices for the purposes of identifying whether the obligations set out in this Regulation are to be supplemented by means of a delegated act falling within the scope of the empowerment set out for such delegated acts in this Regulation, or by presenting a proposal to amend this Regulation. This is without prejudice to the possibility for the Commission to, in appropriate cases, open proceedings under Article 101 or 102 TFEU. Such proceedings should be conducted in accordance with Council Regulation (EC) No 1/2003 ⁽¹⁾. In cases of urgency due to the risk of serious and irreparable damage to competition, the Commission should consider adopting interim measures in accordance with Article 8 of Regulation (EC) No 1/2003.

^{(1) Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ L 1, 4.1.2003, p. 1).}

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