2024 is coming to an end and what a year for Shaping Competition in the Digital Age! The DMA picked up steam with record pace, we have a new EU Commissioner for competition and a new law in the UK (DMCCA) – to name only a few developments of a packed year. 2024 has proven that there is unwavering willingness to tame (or even break?) Big Tech – not only in Europe but also beyond. Relive the most memorable moments of Big Tech regulation in 2024 and find out what to expect from the year to come.
By Rupprecht Podszun, Oles Andriychuck, Jasper van den Boom and Sarah Hinck
2024 Retrospective – A year of change?
If you think back of this year – what sticks? What are the moments that you most vividly remember in digital regulation? Was it when…
- the Telegram boss was captured at Paris airport?
- Commissioner Breton flexing his DSA muscles in a strongly worded letter, before his unexpected retreat from public office?
- Elon Musk was not admitted to the DMA party for lack of significant user base with X, but found some company in Mar-a-Lago parties with @therealdonaldtrump?
- news channels broke that a US district court threatened to break up Google?
In the SCiDA team we are not going for the glitzy headlines. We find our true dedication in the more mundane excitements. For instance, our UK project leader probably remembers 2024 as the year when the DMCCA finally became the law. Our German project leader reads the final press release of the Bundeskartellamt again and again with which the legendary Facebook case winded down – a case without which we may not even be here. For the SCiDA groundworkers, the year was dominated by attempts to keep up with everything happening in terms of DMA enforcement. Things are fully underway now. After some explosive months, with weekly news about trailblazing digital competition policy, it feels like a routine is finally being established. Even the delayed designation of Booking.com starts to feel familiar and commonplace. However, this momentary lull may simply be the calm before the storm as the first non-compliance investigations will soon be concluded: Meta will learn about the limits of freely given consent in the investigation of their pay-or-consent model, and whether their idea for subscription fees will be cancelled by the Commission; Apple and Alphabet are investigated for anti-steering with respect to their app stores, and the Commission will likely steer the firms away from using scare screens or other nudges; Alphabet will be investigated for one of its most infamous and well-studied practice – self preferencing – which we have discussed at length with Albrecht von Sonntag; and Apple itself is investigated for its failure to provide uninstallation options, and has become the subject of the later announced investigation for their “new and standard” business terms. Will any of these compliance mechanisms pass through the eye of the storm unscathed? If we were a gambling blog (we are not), we’d say don’t bet against the house Commission.
EU: 2024 – The year of the DMA
One year of DMA since the first notification of gatekeepers had already passed this summer and we are now counting seven gatekeepers (Alphabet, Amazon, Apple, Booking, ByteDance, Meta and Microsoft), 23 core platform services, 6 non-compliance proceedings, 2 preliminary findings and two specification proceedings (to assist Apple complying with the DMA interoperability obligations). We also have witnessed a few escapes from DMA designation: X’s online social networking service successfully managed to convince the Commission of its rebuttal, arguing that it does not qualify as an important gateway between businesses and consumers even though the quantitative thresholds were met. Similarly, rebuttals also worked for the advertising services X Ads and TikTok Ads as well as Apple’s iMessage service and Microsoft’s web browser Edge, the online search engine Bing and its online advertising service Microsoft Advertising. Unsuccessful (for now) has been ByteDance’s attempt to escape designation for its social networking service TikTok. The General Court has confirmed the Commission’s dismissal of ByteDance’s rebuttal and has set high bars for rebutting the quantitative thresholds of Art. 3 (2) DMA. But we have also seen discontent with the Commission’s acceptance of rebuttals: The web browser competitor Opera has appealed the Commission’s decision to refrain from designating Microsoft Edge.
Besides these milestones for designation, the more pressing question remains: Did the DMA finally bring the long-desired effect of more competitive digital markets – or in DMA-language: to fairer and more contestable markets by effective compliance with the DMA? The word “finally” may be a bit misleading. Rome was not built in a day, and Redmond is not taken down in one. The DMA cannot change markets over night. Our take is: It is probably too early to tell. Many battles are still fought.
Having said that, some effects can already be observed and experienced. Smartphone users can choose alternative app stores on their phones such as Epic Games Store, AltStore PAL or Setapp Mobile on iOS and many more on Android. Consumers have already been confronted with making a browser choice or consent to cross-use of data across services.
Whether this has any effect is hard to tell – the key performance indicators have not been published. They are requested in the annual update of the compliance report, and they might tell a part of the DMA success story. Even though such metrics are provided for in the Commission’s compliance report template, there is nothing to report: Gatekeepers skipped a few data points (at least in the public version). This may be the first step for strengthening transparency obligations or to have a DMA equivalent of Art. 40 of the Digital Services Act (DSA). Unlike the DMA, the DSA foresees access to internal data for vetted researchers for an in-depth risk assessment.
Germany: Sec. 19a – Does slow and steady win the race?
When introduced into German competition law in January 2021, Sec. 19a GWB, the older but shorter and more conservative sister of the DMA, has been considered a forerunner of the DMA and a motivation for the EU legislator to keep up. The forerunner status of Sec. 19a GWB in 2024 has become questionable as DMA enforcement has sprinted to caught up, yet enforcement of Sec. 19a GWB remains active. The German competition authority, Bundeskartellamt, has kept up with the Commission with regard to designating Big Tech. Microsoft, Alphabet, Amazon, Apple and Meta have been designated as undertakings of paramount significance for competition across markets. We count five ongoing investigations initiated already in 2021 and 2022 and two closed investigations following commitments under Sec. 19a GWB and its list of prohibited practices for designated entities. The duration of proceedings calls into question whether the objective behind Sec. 19a (accelerate competition proceedings in digital markets) has been met. One of the innovations in the law was a jumping of the courts: The Düsseldorf Higher Regional Court (which had proved to be recalcitrant independent in the Facebook case) is skipped in 19a-proceedings. The German Federal Court of Justice spoke out twice on 19a-matters: In its first first-instance case ever, the Cartel Senate explained the limits of disclosing gatekeeper information during the designation process to third parties (Google). Later, in a big judgment, it confirmed the Amazon designation (for non-German speakers: SCiDA team members wrote on this case in JECLAP). It took the Federal Supreme Court nearly two years to decide on the Amazon designation – just saying.
The Bundeskartellamt did apply its new enforcement powers under Sec. 19a GWB in a way that is in line with its niche-role as envisaged under Art. 1(6) DMA for the parallel application of national competition law. Investigations looking into Meta’s practices relating to VR glasses or Alphabet’s Google Automotive Services did not overlap with conduct covered by DMA obligations. The recent publication of the designation decision of Microsoft as undertaking having paramount significance for competition across markets under Sec. 19a (1) GWB had an remarkable focus on the cloud business – a ‘mini sector investigation into the cloud markets’ said the head of the Bundeskartellamt, Andreas Mundt, during a recent conference on AI, organised by VAUNET, the German association of private media. He also mentioned that there are cloud and AI cases are in the pipeline. We have also learned that there is a place for national competition law in the DMA universe – and that Sec. 19a GWB is in fact competition law (as opposed to de facto ex ante regulation). This had been confirmed by the Federal Supreme Court after the Amazon hearing in April 2024.
The Bundeskartellamt, far from shying away from Big Tech cases, has been quite active also outside the Sec. 19a world: Like a couple of other competition authorities, it scrutinized AI cooperations, in particular the infamous Microsoft OpenAI cooperation but also Microsoft’s acquisition of Inflection AI. In the latter case, the Bundeskartellamt’s concerns about Big Techs’ grasps for AI innovation have led the authority to make a clear statement regarding poaching of staff with highly specialised know-how and its qualification as acquisition for the purpose of German merger control law (“acqui-hire”, a new term we learned in 2024).
The UK’s DMCCA – Warming up from the benches.
#After the introduction of the long-awaited UK response to the DMA, the Digital Markets Competition and Consumers Act (DMCCA) on the 24th of May 2024 including detailed (draft) guidance, not much has been spread about enforcement activities. When the law enters into force beginning 1 January 2025 this might eventually change. Until then stakeholders are eagerly awaiting the outcome of the consultation on the draft. While it is as of yet unknown how long activity under the DMCCA will take, we have received some hints from the CMA: it will first focus on areas that are relatively well studied. This likely includes areas for which the CMA has already conducted market investigations, and recent investigations are showcased in the CMA’s provisional decision report on its market investigation in mobile browsers and cloud gaming, identifying a number of features in mobile browser and cloud gaming markets restricting competition. This ongoing investigation complements the many in-depth investigations performed by the CMA in recent years, including their highly regarded studies into mobile ecosystems and cloud computing services. It is clear that DMCCA enforcement will not require guesswork, but will find its basis in the knowledge and experience already obtained by the CMA in their years of studying digital markets and competition.
The new UK government caused a little stir with plans for reform, including the CMA. Prime Minister Keir Starmer was reported to say in a courting event for investors in October: “We will make sure that every regulator in this country – especially our economic and competition regulators – takes growth as seriously as this room does.” In other times, it would hardly have made news that competition is to support growth, but these are not other times. Juliette Enser, an interim director at the CMA, dutifully put growth Number 1 on her agenda in a December statement at King’s College London.
Beyond Europe: From Smartphone Acts to Google Break-ups
The EU, UK and Germany have not remained the only jurisdictions walking new paths to regulate Big Tech platforms. The SCiDA International Series has reported on the so-called “Brussels effect” (Anu Bradford). When the DMA was implemented, many suspected that other jurisdictions may follow (Helena Drewes/Alexander Kirk). The DMA has sparked a wave of new regulation such as the Digital Markets Bill of Law and proposed updates to the existing competition law in Brazil, the proposed updates to the Turkish Competition Act with striking similarities to Sec. 19a GWB as well as the introduction of the so-called Smartphone Act in Japan. However, many regulators are taking their own approach to regulating digital markets, making it fascinating to study what is happening worldwide. Therefore, the SCiDA International Series is to be continued as much is happening elsewhere. Australia – a jurisdiction that does not shy away from tough measures such as smartphone bans for children – has now also proposed a new ex ante digital competition regime borrowing from the DMCCA as well as the DMA. Likewise, South Korea has introduced DMA-like amendments to its existing competition law in the form of the Online Platform Antitrust Regulation Act. Also, enforcement activities in the US against Big Tech platforms come fast and furious: with numerous antitrust actions against Apple, Alphabet and friends still pending. It seems that under the direction of Lina Kahn and Jonathan Kanter, the US has started catching up in their efforts to restore competition in digital markets. Does this mean that things will change under the reign of Gail Slater? Cristina Caffarra has detailed how Trump 2 is likely to shake things up in antitrust enforcement, but that Lina Kahn’s impressive sword throw won’t be walked all the way back, but merely halfway, setting a new and yet to define normal for US antitrust enforcement against digital firms.
For the ongoing antitrust enforcement, much ink has been spilled recently on whether or not and how Google should be broken up following the US Department of Justice’s proposal for remedies, which may include the forced divestiture of Chrome and/or Android by Alphabet. Divestiture is however not the only option on the menu, as detailed by Alissa Cooper, Zander Arnao, and Jasper van den Boom in the Knight-Georgetown Institute workshop report, this is also reflected in the DOJ’s proposal, which presents the judges with an impressive menu of options in terms of behavioural remedies, including syndication.
All these approaches across jurisdictions show that regulating Big Tech and bringing back competition to digital markets have been on top of the agenda in many different places in 2024. At the same time, a competition between competition regimes fit for the digital age can be observed where each approach will reveal strengths and weaknesses over time.
The World of Digital Platform Regulation Ahead in 2025
Some of these strengths and weaknesses will already become visible in 2025 as important enforcement actions are still pending and leadership changes are lining up.
In the EU, digital regulation pioneer Margrethe Vestager will leave her office and look back to a legacy closely connected to her landmark achievements and tight grip on Big Tech. Will the new commissioner Teresa Ribera Rodríguez manage to put competition law and regulation in digital markets equally into the spotlight? Not too many details have been leaked during her hearing on 12 November 2024, her priorities seemed to focus on more empowerment of the Commission for DMA enforcement (more staff?), simplified competition rules (the new Article 102 Guidelines?), focusing on the worst offenders (Big Tech?) and the green transition (more green light for green collaboration?). What we can expect with certainty from the Commission in 2025 is the outcome of the ongoing non-compliance and specification proceedings, updated compliance reports and potentially more litigation, with appeals against designation decisions from Apple, Meta, ByteDance and Opera still pending. And for those of our readers who need some help to transition from Vestager to Ribera, it’s not too late to check out the famous D’Kart Antitrust Advent Calendar 2024 to test your knowledge on both the leaving and incoming competition Commissioner.
Also in Germany, 2025 will be a year of political change with elections upcoming in February 2025. Effects on competition policy remain to be seen. However, regarding Sec. 19a GWB, 2025 is also the year of evaluation, requiring the German Federal Ministry for economic affairs to inform the German legislator about enforcement experience. If the new German government proves to be discontent with the shelf warmer status Sec. 19a GWB seems to have currently, updates to the German competition law act may be on the horizon (again). During the above mentioned Vaunet AI conference, Thorsten Käseberg, head of unit responsible for competition policy in the German Federal ministry for economic affairs and climate protection, hinted at potential reform proposals: strengthening private enforcement of Sec. 19a GWB and new prohibitions addressing AI risks are not off the table. Having said that, the Bundeskartellamt is of course a champion of enforcement independent from government meddling.
Turning to the UK, we have not given up on the UK DMCCA to gain momentum. We keep our fingers crossed that 2025 will be not only the year of the Snake but also of DMCCA enforcement. As the law officially enters into force on the 1st January 2025 and ongoing investigations against Apple and Google under the UK Competition Act had been closed already this summer to resolve app store concerns under the novel DMCCA, our spirits remain high. And let’s not forget the massive opt out collective redress hearings against Big Tech pending at another UK competition institution, the Competition Appeal Tribunal, which will continue in 2025.
Across the Atlantic, the White House will have a new old resident as of January 2025. What does this mean for competition in the digital age in the US (and in Europe)? Who knows. But the good news is: The antitrust nominee is not Elon Musk. With reference to ‘Big Tech run wild’, the President-elect nominated Gail Slater, former policy advisor to JD Vance and tech policy advisor at the US National Economic Council as assistant attorney general for the Department of Justices’ antitrust division. Gail Slater is of Irish origin and once practiced antitrust with Freshfields in Brussels and London. She also worked for a Big Tech lobbying organisation called the Internet Association, and the Fox Corporation. Whether such a resume is comforting or not, may lie in the eye of the beholder.
The core question for 2025 is: What will we see on the ground? How do the no-more-brand-new rules shape competition in the digital age? Will markets be more contestable? Will business users, consumers and possibly even competitors feel the difference? If there is a difference – is it due to the law – or to technological disruptions? And if it is due to the law – is it the DMA, traditional competition law, an X-tycoon who abuses his bromance to hit hard at other tycoons, or a US judge who decides to break Alphabet? We will be watching this in this space (and if you do not want to miss our updates, please subscribe to our newsletter here.)
One thing is certain: the SCiDA team will continue to track and study the implementation of digital regulation in the EU, UK, and US. If you are interested in cross-jurisdictional research, have a look at our new working paper where we compare and analyse the DMA, DMCCA, and Sec. 19a GWB. For now, the SCiDA team wishes you happy holidays and a happy new year 2025 which will definitely continue to be exciting!
