Big Tech antitrust breaches are better prevented than cured, Dutch authority's Snoep says

9 May 2019 1:25pm

This is the first of three stories from an exclusive MLex interview with Martijn Snoep, head of the Dutch competition authority. The other two stories can be found here:

Part 2/3: Leadiant faces Dutch supply-restriction questions over orphan drug's ingredients

Part 3/3: Misleading online ads and EU dual-pricing ban scrutinized by Dutch authority

6 May 2019. By Matthew Newman.

How can antitrust enforcers stop tech companies from moving fast and breaking things?

One answer, suggested by the head of the Dutch competition authority, might be to take a more collaborative approach based on preventing or quickly halting anticompetitive behaviors, rather than levying headline-grabbing fines.

Companies are more likely to be cooperative when they don’t face penalties, similar to the dynamic that exists in merger reviews, Martijn Snoep said in an interview with MLex in his office in The Hague.

“There is no need for a finding of an infringement,” he said. “It’s all about avoiding that an abuse is going to take place.”

Snoep said the new power — which would be an “order” — could be an EU instrument that would be applied by national regulators. He said it’s important that national authorities have the possibility of applying it “because some of the dominant gatekeeper companies have a dominant position only in one country.”

His idea could be discussed when the authorities’ leaders gather for a bi-annual meeting in June in Brussels. Any changes to the EU’s antitrust rules would have to be proposed by the European Commission and then approved by EU legislators before becoming law.

“It's something that as a competition community we should consider and think about,” Snoep said. “It’s a proportionate tool, so that you can really tailor it to the specific situation, rather than with a broad-stroke demand that every company should provide access to data or interoperability, for example.”

Another advantage to this tool is that it can be implemented within the existing regulatory framework, without needing to pass any new rules, he said. It therefore avoids the risk of “unintended consequences” that accompany any regulatory intervention.

In a recent report commissioned by EU antitrust chief Margrethe Vestager, three academics identified problems related to big tech companies’ network effects, which they said would be better resolved by new regulation rather than competition enforcement.

Playing catch-up

EU antitrust probes against Microsoft, Intel, Qualcomm and Google have resulted in billions of dollars in fines, but the European Commission has been criticized for taking too long to reach decisions in fast-moving industries.

For example, the commission’s probe into Google Shopping yielded a headline-grabbing 2.4 billion-euro fine ($2.7 billion) in June 2017, and ordered Google to end its anticompetitive conduct. But it came more than two years after the investigation began in April 2015. That’s a long time for a small business struggling to reach consumers online.

Snoep’s idea is that authorities could move much more quickly — perhaps even preemptively — by stepping away from the adversarial approach, in which decisions need to be able to stand up to court challenges.

“It's just an order to do things to prevent abuse,” he said. If you move away from the “quasi-criminal” legal context of fines, the decision-making process can be much quicker.

An antitrust authority would first identify whether a company has a dominant market position either on its own or with a group of companies, Snoep said. The second step is to “impose a specific and proportionate condition, a specific remedy, to avoid an abuse of dominance.”

The new rule would be similar to a “commitment” decision by the commission, he said. After the commission has opened a formal antitrust probe, the EU regulator can agree to settle the case after a company agrees to market-opening remedies to address competition concerns.

In these decisions, the commission doesn’t reach a finding on whether the company has violated antitrust rules, and no fines are imposed. However, companies can be fined if they don’t abide by the commitment to change their behavior.

This is the first of three stories from an exclusive MLex interview with Martijn Snoep, head of the Dutch competition authority. The other two stories can be found here:

Part 2/3: Leadiant faces Dutch supply-restriction questions over orphan drug's ingredients

Part 3/3: Misleading online ads and EU dual-pricing ban scrutinized by Dutch authority

ABA 2019