To be precise, European Union antitrust regulators have announced an update to longstanding rules governing the assessment of market power, particularly in relation to Big Tech companies and their digital ecosystems. They emphasised that the revised rules will consider not only merger deals and market dominance but also the influence of companies' digital ecosystems and the impact of their free products or services.
The Market Definition Notice, a set of rules in place for nearly three decades, is being updated to address concerns that the existing framework has not kept pace with developments in technology markets, particularly concerning companies offering free services in exchange for user data. Critics, including legal experts and academics, have argued that the current antitrust and merger laws are inadequate for regulating such dynamics.
Under the updated rules, regulators will scrutinise multi sided platforms and digital ecosystems, such as those built around mobile operating systems, to assess a company's market power. Additionally, the provision of free products and services will be factored into determining market share, which may be assessed based on sales, capacity, or the number of active users or website visits.
The revised framework will also place greater emphasis on factors beyond pricing, including innovation, product development, and the quality of goods and services. This shift in focus could have implications for industries beyond tech, such as pharmaceuticals.
Importantly, the updated rules will also consider the impact of imports on EU businesses, reflecting a broader approach to assessing market competitiveness. European Union officials highlighted the importance of maintaining competitive markets to serve consumers effectively, emphasising the need for an appropriate regulatory framework to achieve this goal.
In November 2022, the European Commission released a draft revision of the Market Definition Notice, marking the first update to the Notice since its establishment in 1997. The draft document represented a significant effort in modernising the Market Definition Notice to align with current market dynamics.
According to kluwercompetitionlaw.com, the landscape of market definition has evolved considerably since 1997, with certain developments challenging the traditional role and processes associated with market definition. The debate surrounding the relevance of market definition, notably in digital markets, has gained momentum over the years, prompting scholars and professionals to explore methodologies and procedures designed for these evolving contexts.
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