Case 4: platforms, gatekeepers
and competition
Class European platform policies
Competition
What is it?
Markets work on the basis of supply and demand
Competition = when there is a variety of entities engaged in supply
(suppliers) and demand (buyers) + all entities have acces to information to
engage in a fair process of selling and buying
Belief = competition results in benefits for consumers and benefits
innovation
→ eg low prices, high quality services
In reality = competition is a jungle
Markets are sometimes dysfunctional
→ resulting in some illegal behavior
Fewer sellers can result in an increase of prices for consumers (less
competition)
→ in reverse more players can result in lower prices
Firms can (illegally) agree on prices
→ eg the LCD Screen Cartel in 2010 with secret multilateral ‘Crystal
Meetings’ to agree on prices exchange information
→ snitch from Samsung went to the Commission, other companies were
fined (but not Samsung bc they snitched)
Very big companies can make sure that other companies are put out of
business
→ eg neutralizing competition by buyouts, offer below market prices,
sell at a loss, …
→ eg Meta buying Insta bc they would be a big competitor in the future
Case 4: platforms, gatekeepers and competition 1
, (Meta won the antitrust case in the US)
→ very hard to proof this in court & hard to change past events
Concentration is not only negative for prices, but also diversity and
pluralism
→ eg Belgian merger of Rossel and IPM which would result in monopoly
for French-language news in Belgium
Why should we care about concentration
Low market concentration
→ consumer have a lot of choices
→ fosters competition and diversity
Medium market concentration
→ dominant services, still reasonable variety
→ consumers have options, but big players have more influence
High market concentration
→ consumers have limited chioces
→ impact diversity and choice
→ power concentration
⇒ leads to less drive for innovation etc
Competition law: legal instrument
Three pillars
Antitrust
→ prohibits abuse of dominant powers & prevent anti-competitive
agreements
Case 4: platforms, gatekeepers and competition 2
, Merger regulation
→ supervise mergers & acquisition
State aid
→ prevent distortion of fair competition
⇒ role = safeguard free competition on the common market
Power structure & legal framework
→ merger & antitrust fall under the
National Competition Authority
European Commission
General Court
European Court of Justice
Court cases are mostly won by Commission
EU merger regulation (ex-ante assessment)
Governing those concentrations which may significantly impede effective
competition in the common market
Prevent harmful effects on competition caused by mergers & acquisitions
while recognizing the economic benefits they may bring
→ practice of balance (may impose promises on merging companies)
Case 4: platforms, gatekeepers and competition 3
and competition
Class European platform policies
Competition
What is it?
Markets work on the basis of supply and demand
Competition = when there is a variety of entities engaged in supply
(suppliers) and demand (buyers) + all entities have acces to information to
engage in a fair process of selling and buying
Belief = competition results in benefits for consumers and benefits
innovation
→ eg low prices, high quality services
In reality = competition is a jungle
Markets are sometimes dysfunctional
→ resulting in some illegal behavior
Fewer sellers can result in an increase of prices for consumers (less
competition)
→ in reverse more players can result in lower prices
Firms can (illegally) agree on prices
→ eg the LCD Screen Cartel in 2010 with secret multilateral ‘Crystal
Meetings’ to agree on prices exchange information
→ snitch from Samsung went to the Commission, other companies were
fined (but not Samsung bc they snitched)
Very big companies can make sure that other companies are put out of
business
→ eg neutralizing competition by buyouts, offer below market prices,
sell at a loss, …
→ eg Meta buying Insta bc they would be a big competitor in the future
Case 4: platforms, gatekeepers and competition 1
, (Meta won the antitrust case in the US)
→ very hard to proof this in court & hard to change past events
Concentration is not only negative for prices, but also diversity and
pluralism
→ eg Belgian merger of Rossel and IPM which would result in monopoly
for French-language news in Belgium
Why should we care about concentration
Low market concentration
→ consumer have a lot of choices
→ fosters competition and diversity
Medium market concentration
→ dominant services, still reasonable variety
→ consumers have options, but big players have more influence
High market concentration
→ consumers have limited chioces
→ impact diversity and choice
→ power concentration
⇒ leads to less drive for innovation etc
Competition law: legal instrument
Three pillars
Antitrust
→ prohibits abuse of dominant powers & prevent anti-competitive
agreements
Case 4: platforms, gatekeepers and competition 2
, Merger regulation
→ supervise mergers & acquisition
State aid
→ prevent distortion of fair competition
⇒ role = safeguard free competition on the common market
Power structure & legal framework
→ merger & antitrust fall under the
National Competition Authority
European Commission
General Court
European Court of Justice
Court cases are mostly won by Commission
EU merger regulation (ex-ante assessment)
Governing those concentrations which may significantly impede effective
competition in the common market
Prevent harmful effects on competition caused by mergers & acquisitions
while recognizing the economic benefits they may bring
→ practice of balance (may impose promises on merging companies)
Case 4: platforms, gatekeepers and competition 3
