The Digital Markets Act (DMA) is the European Commission's flagship legislation to level the online playing field. Competition law has been regulated at an EU level for many years, with Member States also having their own national regulators. What will the DMA mean for the relationship between EU and Member State competition law and what will national regulators be required to do as a result?
Call for enforcement rights during the legislative procedure
As the DMA progressed through the legislative process, national competition authorities called for powers to be able to enforce it in their own right, with the Commission retaining primary responsibility. In addition, they demanded a system providing close coordination between the agencies involved. They also called for a right to ask the Commission to conduct market investigations or inspections of gatekeepers or designated gatekeepers, with France, Germany and the Netherlands lobbying for an even stronger enforcement role for Member States.
The primary rationale for this was that national competition authorities already had expertise in addressing competition issues in the digital economy which needed to be leveraged to achieve the fundamental objectives of the DMA. Moreover, the absence of such coordination would, as expressed by the national regulators in a Joint Paper in June 2021, create unnecessary risks. These included inefficiencies and significant delays due the European Commission's insufficient resources and the possibility of conflicting decisions due to inconsistent application of EU and national competition law.
The role of national competition regulators under the DMA
Despite national competition authorities’ call for enforcement rights of their own, the Commission will remain the sole enforcer of the DMA. In the end, the legislators agreed that this was the best way to monitor the cross-border activities of gatekeepers properly and to guarantee an unfragmented internal market as well as to provide legal certainty. The DMA confines the role of the national competition authorities primarily to carrying out ancillary activities:
- National competition authorities may use information received by the Commission pursuant to Article 14(1) regarding a gatekeepers’ intended concentration to ask the Commission to examine the concentration under Article 22 of Regulation (EC) No 139/2004.
- The Commission may ask one or more national competition authorities to assist in a market investigation, regarding: the designation of an undertaking operating a core platform service as a gatekeeper, the examination of whether a gatekeeper has engaged in systematic non-compliance, and new services and new practices and their addition to the list of core platform services.
- National competition authorities shall, at the Commission’s request, provide the Commission with all necessary information to carry out its duties assigned to it by the DMA.
- The officials of the national competition authority in whose territory an interview, relating to the subject-matter of an investigation, takes place may (at their request) assist the officials authorised by the Commission in conducting the interview.
- The Commission may request a national competition authority in whose territory it intends to conduct an inspection of an undertaking, to assist. During the time of the inspection and in order execute it, national competition authorities may, for instance, enter premises, examine books, make copies and gain access to IT structures or seal business premises of undertakings.
- The Commission may appoint officials from national competition authorities to monitor the obligations laid down in Articles 5, 6 and 7 DMA and measures that have been imposed on gatekeepers under Articles 8, 18, 24 and 25 of the DMA.
- National competition authorities also serve as point of contact for third parties having information about any practice of a gatekeeper. The national competition authorities have full discretion as to whether or not to follow-up on the information. They are required to pass on any relevant information to the Commission.
- The Commission may consult national competition authorities on any matter relating to the application of the DMA.
- The Commission and national competition authorities must cooperate with each other and inform each other about their respective enforcement actions through the European Competition Network (ECN), which is the network of all national competition authorities within the EU.
- National competition authorities may initiate investigations against gatekeepers and impose obligations on them on the basis of national competition law. However, they are obliged to inform the Commission without delay. This does not apply to decisions and measures taken on the basis of national merger control law.
- National competition authorities enforcing EU and national competition law may, on their own initiative, conduct an investigation into a case of possible noncompliance with Articles 5, 6 and 7 DMA on their territory after informing the Commission.
- The European Competition Network will be part of the “high-level group”. In this context the ECN will provide the Commission with advice, expertise and recommendations within its sphere of competence.
National legislation in conflict with the DMA?
In order to avoid fragmentation of the internal market, under Article 1(5) of the DMA, EU Member States may not impose further obligations on gatekeepers by law, regulation or administrative measures in order to ensure contestable and fair markets.
In contrast, Article 1(6) states that the provisions of the DMA do not, in principle, supersede EU and national competition law. Articles 101, 102 TFEU and sections 1, 19 and 20 of Germany's Act against Restraints of Competition (ARC) therefore remain applicable which means the DMA does not restrict the powers of national competition authorities in the application and enforcement of EU and national competition law.
However, an exception is provided under Article 1(6) when it comes to national competition law prohibitions of gatekeepers’ unilateral conduct, which impose additional obligations on gatekeepers, i.e. obligations that already exist under the DMA.
In light of this exception, there is a question as to whether national laws regulating the market behavior of gatekeepers are in conflict with the DMA. This could be relevant for several jurisdictions, including Germany, Austria, Greece and Italy, which have recently introduced or are considering introducing such provisions.
For example, the German national legislature introduced the provision in section 19a ARC in 2021, giving the German Competition Authority (Bundeskartellamt) the right to restrict the market behavior of undertakings with an overriding cross-market importance for competition. The Bundeskartellamt has already initiated proceedings against Amazon, Alphabet, Apple and Meta on the basis of section 19a ARC. In view of the supremacy of the DMA, however, it is highly questionable whether this provision (or other comparable national provisions) will have any practical significance or be superseded by the DMA's conduct obligations for gatekeepers.
