Introduction
This article analyzes competition in digital platform markets by comparing the treatment of conduct covered by the European Union’s Digital Markets Act’s (DMA) ex-ante rules with ex-post enforcement of United States antitrust law.
Section I argues that the ambiguous welfare and competitive effects of the vertical restraints policed or prohibited by the DMA, the mixed competitive implications of the remedies the DMA mandates, and the rapidly evolving and disruptive nature of digital platform markets, make these markets an inappropriate target for ex-ante regulations. Even when some anticompetitive effects in consolidated markets are
observed or plausible, they may still be consistent with increased consumer welfare due to offsetting benefits. Thus, case-by-case ex-post antitrust enforcement with remedies tailored to the circumstances is a more appropriate tool for regulating these markets than ex-ante DMA-style rules.
Section II examines the pro- and anticompetitive effects and implications of the business practices prohibited by the DMA, and the mandates that the DMA imposes on gatekeeper firms. Section III uses real-life evidence and examples to analyze the DMA and ex-ante rules’ effects on the very goals that are cited to justify these rules. These include:
- Fairness and market contestability;
- Certainty and predictability; enforcement and litigation costs; and
- Technological innovation and diffusion, including around artificial intelligence (AI).
Section IV analyzes two high-profile U.S. antitrust law cases, the Google Search verdict and remedies decision and Apple v. Epic Games, to demonstrate how the flexibility and adaptability of ex-post antitrust law enforcement can better achieve the stated goals of the DMA and other ex-ante regulatory proposals with regard to digital platforms.
Section V concludes that the benefits of the flexible common law ex-post enforcement approach of the United States for consumer welfare and innovation outweigh the higher costs of enforcement. It further argues that evidence from the EU’s experience with DMA enforcement shows that ex-ante rules generate comparable costs and uncertainty, calling their benefits into question.
The article concludes that ex-ante regulatory prohibitions are an inappropriate means for addressing anticompetitive concerns in digital platform markets.
