The Danish Competition and Consumer Authority (“DCCA”) has created a new division for Digital Platforms to boost enforcement of competition rules in the digital economy. The new division is a result of the acknowledgement in Denmark and Europe that competition in the digital sector is different from more traditional markets.
The technological evolution that the world has experienced the last two decades has caused tremendous changes to the economy. It has created new products, new markets and economic growth. It has also given rise to new business models based on Big Data and unprecedented economies of scale.
Competition Policy for the Digital Era
The Juncker Commission’s focus on digital markets has led to considerable fines being issued to Google and Facebook among others. It has also entailed a discussion on whether the current EU competition rules are fit for the digital economy. For example, in a speech held in Copenhagen in mid-September, Commissioner Vestager maintained that current competition law could only solve part of the problems with digital markets. To ensure consumers’ trust, rules that increase the transparency on how the platform operates are needed, Commissioner Vestager argued.
On the other hand, in an analysis of the Competition Policy for the Digital Era, commissioned by Commissioner Vestager, a working group concluded that the competition rules were fit for the purpose. However, the digital platforms’ use of data and the low-cost production of digital services pose new challenges to the competition authorities that must be aware of the advantages these give large incumbent firms over smaller competitors.
The Digital Market Division
The Digital Market Division was established following recommendations from the former Danish government’s Disruption Council – a think-tank tasked with preparing the Danish economy for the digital era. The Disruption Council believed that the risk of large international digital platforms abusing their dominant position was increasing, threatening less powerful companies. To help smaller Danish companies navigate in the digital market, the former Danish government decided to strengthen the DCCA’s supervision of digital platforms.
The Digital Market Division shall among other things enforce competition rules in the digital economy, do assessments of the digital market and coordinate the DCCA’s studies of machine learning, artificial intelligence, big data and the use of algorithms. Its objective is to ensure SMEs the best possibilities for growth and safeguard consumers’ ability to navigate among online platforms. The division was established in May 2019, and its first decisions and analysis are still to be seen.
Horten Law Firm, Copenhagen
Andreas Christensen, Partner
Marie Løvbjerg, Attorney
Kristen Helms Skov, Junior Associate