EU regulators may revise rules defining companies’ market power

Business

European Union antitrust regulators may revamp decades-old rules covering the market power of companies to take into account cases such as when tech giants offer products for free while harvesting users’ data, or the impact of deals on innovation,

The comments from the European Commission on Monday followed feedback from national competition watchdogs, experts and other parties during a 16-month consultation of the Commission’s rule known as the market definition notice.

The rule, which dates back to 1997, helps regulators measure a company’s pricing power in a merger or its power to shut out rivals in an antitrust case. The regulators use that information to decide whether to demand concessions from the company.

Lawyers and academics have in recent years criticised EU antitrust laws for failing to keep up with the times, especially regarding U.S. tech giants’ merger deals and market power.

The feedback showed that the current rule may be inadequate when it comes to small, but lasting increases in prices, and in digital markets where products or services are offered for free, the EU competition enforcer said.

It is also not up to date when assessing geographic markets in an era of globalisation and import competition, the use of quantitative techniques, the calculation of market shares and non-price competition such as innovation.

“The evaluation indicates that the notice does not fully cover recent evolutions in market definition practice, including those related to the digitalisation of the economy,” Commission Vice President Margrethe Vestager said in a statement.

“We will now analyse if and how the notice should be revised to address the issues we have identified,” she said.