Enhancing fairness in Platform-to-Business relations

 On 20 June, GSMA Europe hosted a Mobile Meetings Series that focused on platforms and what type of EU regulatory and policy framework will best ensure the dynamic digital economy. The event explored in particular whether the European Commission’s proposed platform Regulation sets out sufficient rules to curb platforms’ anti-competitive practices.

Online platforms are key enablers of the digital economy, which they have profoundly shaped over the course of the past two decades. They perform a wide set of functions crucial to our economy, ranging from marketplaces to search engines and application distribution platforms. Regardless of the sector in which they operate, they share at least two key characteristics: they act as intermediaries bringing together consumers and business providers, and they collect data while facilitating these interactions. Their intermediation role has transformed them from a gateway to the internet to a gatekeeper for companies seeking to offer consumer services on the net.

All participants agreed that platforms are crucial for the economic growth of both start-ups and larger companies which rely on platforms to provide their services online. Differing opinions arose however regarding how best to curb anti-competitive practices as participants discussed to what extent platforms are abusing their gatekeeper role and whether competition law or regulation is best fit to tackle any abuse.

Some attendees pointed to specific circumstances when platforms abuse their gatekeeper position notably when providing competing services in the downstream market; they felt as a result, that ex-post competition law does not represent an effective remedy. Other participants disagreed viewing competition law as sufficient tool provided it is robustly enforced.

The Commission’s proposed Regulation aims to address these challenges by introducing both transparency requirements for platforms and a redress mechanism to correct misconduct. Some participants expressed concern that this ex-ante regulation would create an additional burden on small businesses thereby hampering economic growth. Other attendees welcomed an EU-wide approach to tackle imbalances such as unilateral changes of terms and conditions, delisting and user rankings though highlighting that the Regulation should be more ambitious.

In particular, they stressed that transparency requirements alone are not sufficient to correct asymmetries between large platforms and both their business and consumer users because the latter do not have sufficient bargaining power. Moreover, some participants suggested that thresholds and some basic safeguards could be included in the proposal so that it focused only on large platforms. Finally, participants noted that including prohibitory provisions against unfair practices might be a way to avoid additional administrative burdens.

Discussions also touched upon the proposed Observatory that will support the Commission by monitoring the evolution of the online platform economy and in reviewing the regulation’s impact. Towards the end of the debate, participants agreed on the need for pan-European rules to prevent fragmentation while ensuring the development of the European Digital Single Market.

The major takeaway from the discussion lies in the importance of designing effective tools to prevent unfair practices without introducing burdensome solutions while at the same time supporting the development of the platform economy.

Continue reading: GSMA-ETNO position paper on P2B Regulation

Hosted in our offices, the Mobile Meetings Series are small scale – but big scope – invitation only events for the Brussels public policy audience. Join us for a different take on the main issues affecting the mobile communications industry and its place in Europe’s information society.

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Take a look at our previous events