@WavesBlog
A self-proclaimed essential facility.
Wednesday, October 30, 2024
Tuesday, October 29, 2024
Pay or okay under the DMA and much more by other Speakers (even DMA "compliance by design")
Centre for a Digital Society, Video here.
These are my very rough talking points on pay or okay in full length (more than I actually had the chance to say)
As we all know, contestability is one of the DMA’s two primary objectives, the other being fairness. The recitals that specifically refer to the obligations under Article 5(2) expressly address the goal of contestability. The General Court in its recent decision Bytedance ruling dismissing ByteDance’s action seeking the annulment of the European Commission’s designation decision of its TikTok service defines the objective of ensuring the contestability of markets as the ability of undertakings to effectively overcome barriers to entry and expansion and challenge the gatekeeper on the merits of their products and services. Importantly the Court also pointed out that the purpose of the DMA is to ensure the contestability of the position of gatekeepers not only by other gatekeepers but also, or even especially, by other operators which are not gatekeepers for a given CPS. contestability’ relates above all to the ability of undertakings which are not gatekeepers for a given CPS to challenge those gatekeepers on the basis of the merits of their products and services. What this provision aims to address are the advantages in terms of data accumulation, thereby raising barriers to entry, from which gatekeepers benefit. Thus, it aims to ensure that gatekeepers do not unfairly undermine the contestability of core platform services.
Meta presented the pay or okay model as its compliance solution with Article 5(2) to the Commission. The issue before us is not so much whether the solution for compliance with Article 5(2) abstractly conforms to the objective of ensuring contestability, this is not how the DMA is supposed to work, but whether it is directly compliant with the obligations set forth in Article 5(2). Therefore, we must look to the letter and spirit of the obligation. The pay or consent model presents users with a binary choice. Either users subscribe for a monthly fee to an ads-free version of these social networks or to a free-of charge access to a version of these social networks with personalised ad. Users who do not consent if they want to continue using the service have to pay a monthly fee.
This is clearly in breach of the DMA In terms of legislative history of the DMA it should be remembered that the elements laying down the requirements for consent under the DMA reveal that the legislators were very well aware of the shortcomings surrounding consent. As a matter of fact, the rapporteur proposed to remove the option of consent, arguing that informed consent is “virtually unachievable” and instead opt for an outright prohibition. Recital 36 emphasizes the necessity for gatekeepers to enable end users to freely choose to opt-in to data processing by offering a less personalized but equivalent alternative. This is the condition specified by the DMA to ensure that the user is able to choose freely.
In order to be compliant what should Meta do then? First, users who do not consent should have access to a less personalized service. It should be noted that in this case, "less personalized" refers to the personalization of advertising – meaning a service that uses less data. Second, users who do not consent should have access to those social networking services are free. Otherwise this wouldn’t be equivalent to Meta’s social networking services which are also free. A paid subscription is not a valid equivalent to free access. Commission officials noted that Meta could still offer a subscription option, but any paid choice would need to be an additional offer (i.e. a third choice) on top of a free equivalent that does not demand users consent to being tracked.
I think the DMA is clear and that Meta's pay or okay is in breach of the letter of the DMA. I find it quite surprising that this was proposed as a compliance solution, and the Commission must conclude the proceedings by reaching an infringement decision. Therefore, if users do not have access to a less personalized but equivalent alternative, there isn't a true choice, and it cannot be said that users are able to freely choose. The pay or okay model is thus non-compliant because it does not allow users to exercise their right to freely consent to the combination of their personal data. Consequently, citizens aren't able to take control of their data.
Obviously, Meta claims that it is compliant with the DMA. They also argue that their pay or okay model was legitimized by the Court of Justice in the Meta ruling. This preliminary ruling, as I believe we all know here, stems from the German Facebook saga, which the Bundeskartellamt has recently managed to conclude. The judges stated in that ruling that a paid version of a service may be offered as an alternative to tracking ads, provided that the fee is appropriate and only if necessary - le cas écheant (cumulative conditions). In the DMA context, the gatekeeper would therefore have to argue why a fee falls into "le cas échéant." But is that fee truly really meets le cas échéant? In reality, Meta could offer an alternative service with ads that do not rely on any personal data for targeting — such as contextual advertising. Meta has never explained why it has not offered users a free, contextual ads option.
Is the pay or consent model a complex case under the DMA that requires numerous panels? I would not say so, and the Commission is right to proceed swiftly to an infringement decision. This obligation is clear enough to be self-executing.
This does not mean dealing a fatal blow to targeted advertising. No, because those users who prefer it can choose it, but those who do not want it can also make a choice. It's not that a paid option cannot be offered, but there must also be an equivalent and free option available. At this point, this offering could be supported in another way, such as through contextual advertising. Users who are also allergic to contextual advertising can choose to pay for an ad-free option. A model like the pay or okay, which is likely in breach of data protection laws, consumer protection laws, and the DMA, and could potentially also be an abuse of a dominant position, cannot be tolerated. Additionally, the Commission has issued a Request for Information (RFI) under the DSA, asking Meta to provide additional information on the measures it has taken to comply with its obligations concerning Facebook and Instagram's advertising practices, recommender systems, and risk assessments related to the introduction of that subscription option.
Some final considerations.
The EU legislator, through the DMA, has taken seriously the need to ensure that consent is freely expressed, even when dealing with a gatekeeper, and has provided gatekeepers with the opportunity to adapt. In some ways, the Court of Justice's ruling in Meta reflects some concepts of the DMA. Of course, the reference to an appropriate payment if necessary ("le cas échéant") must be interpreted restrictively because it involves a fundamental right whose exercise should not become a privilege for the few.
Here, data protection, consumer protection, and the DMA are aligned, which is also a sign that various enforcers can in some cases cooperate well with each other. This pay or ok model must be abandoned, and the sooner an enforcer achieves this ultimate goal, the better. The EDPB expansively interprets the GDPR to introduce an additional requirement, namely the requirement to provide a “free alternative without behavioural advertising”. This would in effect be a quasi-mandatory condition for obtaining valid consent. Meta will therefore need to truly comply and adopt a different solution. The alternatives must be compliant not only with the DMA but also with the GDPR and consumer protection laws, of course.
The Meta ruling was significant, but the DMA had already anticipated many of the points made by the judges, including the topic of forward-looking collaboration among enforcers. A prime example of this is the High Level Group. From the outside, it already appears to be a very important institution in the DMA regulatory framework. From the perspective of civil society, we would appreciate greater transparency of its workings and, perhaps exceptionally, an invitation to participate
The German Facebook saga has recently concluded. Long live Article 5(2) DMA?
Certainly, but also long live Section 19(a) of the GWB. It would be better if other national authorities adopted similar provisions to alleviate the burden on Article 102 concerning the abuse of a dominant position. We'll see if the announced Draft Guidelines can somehow make this article more manageable, but at the moment, there may be many reasons to doubt it. In concluding the Facebook proceeding, the Bundeskartellamt clearly stated that not taking enforcement action based on its February 2019 decision does not imply Meta's behavior is fully compliant with obligations under competition, data protection, consumer protection laws, and the DMA. It suggested that other authorities could use their powers to further improve Meta's service offerings, turning the situation into a relay where the Bundeskartellamt's conclusion serves as a launch point for further enforcement by others. This indicates that improvements might also come from applying GDPR principles such as data minimization.
Final reflection: it’s not about praising the DMA as such, but this
specific provision is well-crafted and highly targeted. It anticipated
developments that we later saw concerning the GDPR and
complements consumer protection effectively. Other provisions may
be less so. The synergy with Section 19a of the GWB is particularly
promising, and it's unfortunate that authorities in other Member States are not equipped
with similar measures in their own legislations.
Monday, October 28, 2024
PLATAFORMAS DIGITAIS NO BRASIL: FUNDAMENTOS ECONÔMICOS, DINÂMICAS DE MERCADO E PROMOÇÃO DE CONCORRÊNCIA
Secretaria de Reformas Econômicas do Ministério da Fazenda, aqui.
Plataformas Digitais no Brasil: Fundamentos econômicos, dinâmicas de mercado e promoção da concorrência
Relatório de Sistematização das Contribuições à Tomada de Subsídios nº1/2024, da Secretaria de Reformas Econômicas do Ministério da Fazenda
Relatório Plataformas Digitais
Competition and Artificial Intelligence
Report to the California Law Review Commission Antitrust Law: Study B-750, here.
Reshaping EU Merger Control: from Harm Detection to Harm Control
S. Marco Colino, K. Lam Macy Chung, here.
Examining the impact of artificial intelligence on market competition and consumers
Hungarian Competition Authority, here.
Wednesday, September 04, 2024
Thursday, August 08, 2024
Tuesday, August 06, 2024
Wednesday, July 31, 2024
Asymmetrical Regulation and What Makes or Breaks A Gatekeeper Lessons for the AfCFTA and COMESA Com
African Competition and Consumer Protection Centre, with Alba as Guest, here.
Tuesday, July 30, 2024
Thursday, July 25, 2024
Monday, July 22, 2024
Nigeria’s $220 million fine against Meta previews a clash over market power
Wednesday, July 17, 2024
Tuesday, July 16, 2024
Friday, July 12, 2024
Apple Pay Antitrust case: EC press conference (get your alternative wallets default and ready)
It's obviously hard to get excited about online payment methods, but this is the most important thing to happen at the interface between fintech, big tech, and competition that I can think of.
Press conference here.
Press release here.
Lucky us, Natasha the Great covered it, here.
I wonder how Australian banks - and the @acccgovau - are taking this news, eight years later (from @wavesblog archives https://www.afr.com/companies/financial-services/apple-is-closed-and-controlling-say-banks-as-iphone-dispute-heats-up-20161017-gs4590 - interestingly also, in retrospect, who their economic consultant was.
Wednesday, July 10, 2024
The Public-In-The-Loop and the European Approach to AI Policy and Regulation
From the AI Office trenches, here.
Filmwerkstatt Düsseldorf v. Meta
Dutch Torpedo at Work – AG Collins’ Opinion in the Booking Case
Monday, July 08, 2024
Round Table on recent developments in merger control standards
Competition Commission of South Africa, here.
Enforcing competition law in digital markets and ecosystems: policy challenges and options
Competition Commission of South Africa, here.
Friday, July 05, 2024
Thursday, July 04, 2024
Wednesday, July 03, 2024
Friday, June 28, 2024
Thursday, June 27, 2024
Wednesday, June 26, 2024
Reforming Article 102 TFEU: A European Social Contract Approach?
Inclusive Competition Forum, here.
[FYI Olivier Guersent yesterday said that 102 enforcement is just fine, no need to fix it]
Tuesday, June 25, 2024
ECN DMA Conference in Amsterdam: This is not a de-briefing.
The conference unfolded under the quintessential Amsterdam weather—perfectly sunny and temperate. The venue was notably accessible and comfortable, which, coupled with its considerable distance from the city’s main attractions (a city where, full disclosure, my husband was born), ensured that attendance remained high throughout the event. The dessert buffet was quite impressive, matched only by the quality of the snacks provided during the post-conference reception.
From a substantive standpoint, the conference aimed to showcase the potential of the Digital Markets Act (DMA) to the business community. I can personally attest to the presence of CEOs from a diverse array of small to medium-sized enterprises, not just from Europe. Naturally, there was a risk that discussions might veer towards the non-compliance of gatekeepers; however, I believe this was mitigated, at least to a point. The presentations and ensuing discussions were constructive, both in the plenary sessions and the breakout rooms.
While I'm not sure if new business ideas directly stemming from the DMA emerged, the conference certainly brought to light several research topics (see our call for papers here). It was particularly intriguing to note the presence of investors interested in enterprises that could benefit from the DMA. Remember, navigating the DMA is a marathon, not a sprint. Fingers crossed.
M. Vestager, speech here.
The DMA, A short guide for tech challengers here.
My X posts, unrolled here.
Friday, June 21, 2024
Kenya: Watchdog now goes after tech giants with law review
The Standard, here.
(Disclosure: consulting for Article 19 until Isa comes back, and worked with others on the submission 😎 - great experience for an academic to work a bit for civil society, highly recommended and also necessary, given the current situation)
Thursday, June 20, 2024
Wednesday, June 19, 2024
Friday, June 14, 2024
Monday, June 10, 2024
Thursday, June 06, 2024
Wednesday, June 05, 2024
Monday, June 03, 2024
Friday, May 31, 2024
Thursday, May 30, 2024
Vertical Interoperability in Mobile Ecosystems: Will the DMA Deliver (What Competition Law Could Not)?
G. Colangelo, A. Ribera Martínez, herehere.
Wednesday, May 29, 2024
Monday, May 27, 2024
Saturday, May 25, 2024
Friday, May 24, 2024
Thursday, May 23, 2024
Monday, May 20, 2024
Saturday, May 18, 2024
Tuesday, May 14, 2024
Wednesday, May 08, 2024
AI and the Law: Regulation and Opportunity
Panel moderated by R. Picker (I don't often agree with him, but always learn something), Video here.
Tuesday, May 07, 2024
Pre-pre-print - Innovation Competition in the Generative AI Space: Future-Proofing Competition Policy (again)?
Please let me know if you have any feedback, here (soon on Arxiv).
Friday, May 03, 2024
Thursday, April 25, 2024
Wednesday, April 24, 2024
Monday, April 22, 2024
EU Data Summit of the Konrad Adenauer Stiftung: Always learning something new and unexpected
Programme, here.
Recordings:
Day 1 here.
Day 2 here.
(Study mentioned during the "Level Playing Field in Accessing Vehicle Data?" here, BTW).
Day 3 here.
Second time that I participate in person, the other 4 editions I followed online (and I hereby gratefully acknowledge that I normally use the summit's recordings also as teaching material for my courses).
This time I participated in a transatlantic panel on antitrust (as a humble researcher and observer, I didn't have perhaps tons to say - apart from talking of saffron risotto - but the other two Panelists did - worth watching for their comments and the excellent questions by Samuel Stolton). But I also had a fun dual role as a moderator of a truly insightful DMA panel (first time I moderated a panel - and it showed - but, luckily, my great Panelists didn't need me at all!).2024 Antitrust and Competition Conference
Day one, video here.
How Much Does Antitrust Enforcement Affect Productivity Growth? (8:23)Case Studies: AT&T & IBM (2:07:25)
The Quest for Next: How Antitrust Shapes Competition and Innovation in Computers and Chips (3:45:17)
Case Study: Microsoft (4:48:19)
Case Study: Google (6:11:24)
The End of the Beginning for the Antimonopoly Movement? (7:33:50)
Day two, video here.
Regulatory Competition, the DMA and Innovation (14:05)How (Not) To Regulate AI: Challenges and Opportunities (1:50:54)
The Proper Role of Economics in Merger Review (3:34:20)
Privacy, Property Rights and the Diffusion of AI (4:52:29)
This Conference is NOT Funded by Big Tech (6:20:55)
Sunday, April 14, 2024
The Forgotten Anti-Monopoly Law: The Second Half of Clayton Act § 7
R. Lande, J. Newman, R. Kelly Slaughter, here.
Alternative browsers report uplift after EU’s DMA choice screen mandate
Natasha The Great and I. Mehta, here.
Wednesday, April 10, 2024
Tuesday, April 09, 2024
The DMA in Action: Early Effects and Global Reach
ITIF (supported by all DMA gategeepers but Bytedance - as well as Boeing, the national champion), video will be here.
Saturday, April 06, 2024
'Super Apps' and the Digital Markets Act
Short piece 'invited' by a Journal, preprint here.
Notate Bene: written before the DOJ v. Apple Complaint was filed ;-).
Not a ‘side dish’: New industrial policy and competition
C. Caffarra and N. Lane, here.
BTW: CC blocked me on X because she finds me and/or my views annoying. No hard feelings, her views will always be welcome on this blog!
Friday, April 05, 2024
-
Centre for a Digital Society , Video here . These are my very rough talking points on pay or okay in full length (more than I actually had...
-
EDPS 20th Anniversar, Book here .
-
C. Bergstrom and J. West, here .
-
Public Knowledge, here .
-
Yesterday, I had the pleasure to teach a 90-minute class on the DMA for Chinese competition officials. Despite a) being just after lunch b) ...
-
J. Almunia, here . From the speech: " Fair and robust competition rules mean – among other things – integrating those markets which, ...