Expert anticipates 'high profile' EU competition probes in digital markets

Competition law specialist Sammy Kalmanowicz of Pinsent Masons, the law firm behind Out-Law.com, said the Commission has spoken about using competition law powers to stimulate growth in online and digital markets. The launch of high profile competition cases in this area may be an opportunity for it to prove its point, he said.

Kalmanowicz was commenting after a report by legal news service M-Lex said that the Commission's competition department had created a new task force responsible for tackling barriers to digital markets.

A spokesperson for the Commission, Ricardo Cardoso, refused to provide details about the new task force to Out-Law.com but said that the Commission's competition directorate is currently "pooling resources in order to contribute its extensive market know-how to the Commission's work to create a digital single market". He said that a new digital single market strategy would be outlined by the Commission on 6 May.

The Commission's stated vision of a digital single market is one where consumers situated across the EU have access to the same online content and services, where it is easy to set up businesses online and offer services in any of the 28 member states, where copyright rules are clear, privacy rights are protected and everyone has access to reliable, high-speed broadband.

"Commission president Jean-Claude Juncker made the connected digital single market one of the top ten policy areas he seeks to pursue during his time in office," Kalmanowicz said. "He wants to undertake a comprehensive approach to stimulate growth in the digital space, by introducing new legislation and enforcing existing rules. He outlined the need to 'break down national silos in telecoms regulation, in copyright and data protection legislation, in the management of radio waves and in the application of competition law'."

"I believe that the Commission will seek to make a visible impact on the development of its digital agenda by selecting high-profile cases to reinforce its ambition. The Commission has previously availed of its competition powers as the preferred tool to foster the EU’s single market and may want to do that in the digital and telecoms space," he said.

The Commission could launch a sector inquiry in the near future, Kalmanowicz said. The Commission has explained that sector inquiries are "investigations that the EC carries out into sectors of the economy and into types of agreements across various sectors, when it believes that a market is not working as well as it should, and also believes that breaches of the competition rules might be a contributory factor".

Kalmanowicz said: "Sector inquiries are used as an information gathering exercise, which has frequently led to follow-up antitrust enforcement action, for example most recently in the pharmaceutical industry."

Strong market players which are active in the digital arena should be particularly interested in this development, Kalmanowicz said, such as price comparison websites, websites providing online reviews, social media platforms, telecoms companies and online retailers.

Last week, UK telecoms regulator Ofcom announced that it was going to conduct an "overarching review of the UK’s digital communications" in a move aimed at future-proofing investment and competition in the market.

Competition law expert Guy Lougher of Pinsent Masons said at the time that Ofcom's "extremely important review" could result in a referral of the UK's digital communications market to the Competition and Markets Authority (CMA) for wider investigation.

Both Lougher and Kalmanowicz have highlighted the CMA's likely increased focus on competition and consumer protection issues in online and digital markets in the coming months. Already this year the CMA has opened separate fact-finding probes on the commercial use of consumer data and the use of online reviews and endorsements.