Reshaping Digital Competition: The New Platform Regulations and the Future of Modern Antitrust

Published date01 June 2022
Date01 June 2022
DOI10.1177/0003603X221082742
AuthorElias Deutscher
Subject MatterArticles
https://doi.org/10.1177/0003603X221082742
The Antitrust Bulletin
2022, Vol. 67(2) 302 –340
© The Author(s) 2022
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DOI: 10.1177/0003603X221082742
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Article
Reshaping Digital Competition: The
New Platform Regulations and the
Future of Modern Antitrust
Elias Deutscher*
Abstract
This article reflects on the way in which the new initiatives to regulate powerful online platforms in
the European Union, the United States, the United Kingdom, and Germany challenge well-established
fundamentals of modern antitrust and thereby reshape the future of competition law. It shows that
the new platform regulations set in motion a profound transformation of modern antitrust law that
operates along four parameters. First, the new platform regulations unsettle the long-standing baseline
assumption that the maximization of consumer welfare constitutes competition law’s core mission.
Second, the new instruments repudiate the orthodox understanding of error costs that advocates
under-enforcement as the optimal standard of intervention in innovation-driven markets. Third, by
relying primarily on rule-like presumptions as legal commands to regulate digital competition, the
new platform regulations reverse the trend toward an increasingly inductive mode of analysis that
characterized modern antitrust under the “more economic” or “effects-based” approach. Fourth,
the new platform regulations also fundamentally diverge from a purely probabilistic standard of proof
which requires the showing that impugned conduct is more likely than not to cause anticompetitive
harm. The reconfiguration of modern antitrust along these four vectors, the article concludes,
foreshadows a new, more inclusive model of innovation and growth in digital markets.
Keywords
digital markets, digital platform regulations, presumptions, error-costs, standard of proof, rules,
standards, consumer welfare standard, decision theory
I. Introduction
Antitrust law is set to undergo a period of tectonic shifts as policymakers in Europe and the United
States are rushing toward the adoption of new regulations to tame the unprecedented economic power
of digital platforms (hereinafter “new platform regulations”). While the current antitrust debate focuses
primarily on the specific substantive and procedural rules, as well as the institutional design of these
new regulatory tools, this contribution takes a slightly different, at the same time forward- and back-
ward-looking angle. It approaches the new platform regulations not only as the heralds of a new era in
*University of East Anglia, School of Law/Centre for Competition Policy, Norwich, UK
Corresponding Author:
Elias Deutscher, School of Law, University of East Anglia, Norwich Research Park, Norwich NR4 7TJ, UK.
Email: e.deutscher@uea.ac.uk
1082742ABXXXX10.1177/0003603X221082742The Antitrust BulletinDeutscher
research-article2022
Deutscher 303
antitrust law. Rather, as these new platform regulations considerably depart from the status quo of
conventional antitrust enforcement, they also constitute a mirror that throws into relief and, thereby,
allows us to better understand the basic economic and normative predispositions that shaped modern
antitrust law over the last four decades. In unpacking how the new platform regulations reconfigure
these predispositions, the article inquires into the broader implications that the new platform regula-
tions may entail for the future of antitrust law. The paper argues that these new initiatives to regulate
digital competition mark a “paradigm adjustment” of modern antitrust along four fault lines.
First, being geared toward promoting fairness, contestability, and non-economic values such as
privacy, the new platform regulations openly reject the long-standing dogma that consumer welfare
constitutes the only rational and legitimate goal of competition law. Instead, they emphasize that the
protection of competition, as the key mission of competition law, extends beyond promoting consumer
welfare and is capable of embracing other values.
Second, the new platform regulations also challenge the conventional wisdom that false positives of
competition law enforcement are more costly than false negatives. Instead, the new platform regula-
tions embody a recalibration of the error-cost framework which recognizes that the probability and
magnitude of anticompetitive harm in digital markets may be greater than usually assumed by conven-
tional antitrust literature.
Third, this recalibration of the error-cost framework becomes apparent in the reliance of the new
platform regulations on a broad set of ex ante rules that introduce presumptions of illegality for specific
types of platform conduct. By forging rule-like legal presumptions as legal commands to regulate the
conduct of digital platforms, the new regulations depart from the “effects-based” analysis as the default
mode of assessment of the “more economic approach.” Instead of endorsing an inductive case-by-case
approach, the new platform regulations highlight the value of economically informed rebuttable pre-
sumptions in antitrust analysis.
A fourth distinctive feature of the new platform regulations that also reflects the recalibration of the
conventional error-cost framework is their recourse to a probabilistically de-weighted or bounded stan-
dard of proof. Instead of requiring the showing of actual or likely anticompetitive effects, the new
platform regulations compel antitrust intervention on the mere basis that specific forms of conduct by
powerful platforms may result in potential anticompetitive harm of significant scale. This bounded
probabilism of the new platform regulations thus marks an important departure from the increasing
trend in conventional antitrust analysis to make the finding of unlawful conduct conditional on the
showing that anticompetitive effects are more likely than not.
Against the backdrop of this recalibration of the goals, error-cost framework, legal commands, and
standard of proof, the article concludes that the new platform regulations epitomize a fundamental
rethink of innovation in digital markets. In fact, the new platform regulations openly discard the
Schumpeterian conception of innovation that has shaped mainstream antitrust enforcement in dynamic,
high-tech markets. Instead of being concerned about the ability of large-scale incumbents to appropriate
and recoup their investments in the development of innovative technology, products, and services, the
new platform regulations aim to ensure market openness and contestability and preserve smaller busi-
ness users’ and rivals’ sunk investments in digital innovation.
To illustrate how the new platform regulations disrupt and evolve competition law in readjusting the
predispositions of modern antitrust, the remainder of the paper is organized as follows. Section II pro-
vides an overview of the new regulations adopted or currently discussed in Germany, the European
Union (E.U.), the United Kingdom (U.K.), and the United States (U.S.) to reign in the economic power
of digital platforms. Section III describes how the new platform regulations depart from the conven-
tional, monolithic, and consumer welfare-based understanding of competition law which assumes that
the ultimate mission of competition law consists of securing that consumers get a better deal in terms
of lower prices, greater quality, new products, or broader choice. Section IV traces how the new plat-
form regulations bring about a recalibration of the conventional error-cost framework of antitrust law.
304 The Antitrust Bulletin 67(2)
Section V shows how this recalibration of the error-cost framework feeds through into the reliance of
the new platform regulations on form-based, rebuttable presumptions. Section VI sheds light on how
the recalibration of the error-cost framework translates into a lowered, probabilistically de-weighted or
bounded standard of proof. Section VII concludes in putting this evolution into a broader context by
exploring how the new platform regulations foreshadow a new model of digital innovation and growth.
II. The New Platform Regulations—An Overview
Over the last years, experts and policy makers across the world have pondered over how competition
law could be reformed to tackle the challenges that the rise of digital markets poses to competition law.
This process culminated in the adoption of the 10th amendment of the Competition Act in Germany,1
as well as the proposals of a Digital Markets Act (DMA) in the E.U.,2 a New Pro-Competition Regime
for Digital Markets (“SMS regime”) in the U.K.,3 and several legislative bills in the U.S..4 All initia-
tives have as their common aim to address growing concerns over the increasingly entrenched eco-
nomic power that a handful of powerful digital platforms have amassed over the last decade.
A. The Entry-Point: The Designation of Platforms with Entrenched Substantial
Market Power
Although these new platform regulations come along in different forms and shapes,5 they have many
features in common. All new instruments revolve around a designation process that ensures that the
new platform regulations only apply to the most powerful digital platforms (see Table 1). Depending
on the jurisdiction at hand, these regulated platforms are referred to as “gatekeeper” platforms,6 plat-
forms with “strategic market status” (SMS),7 “covered platform,”8 or “multi-sided platforms and net-
works holding a position of paramount significance for competition across markets.”9 In terms of their
1. Gesetz zur Änderung des Gesetzes gegen Wettbewerbsbeschränkungen für ein fokussiertes, proaktives und digitales
Wettbewerbsrecht 4.0 und andere Bestimmungen (GWB-Digitalisierungsgesetz) (hereinafter “Competition Law 4.0”)
18 January 2021, Bundesgesetzblatt Jahrgang 2021. For an English translation of the consolidated version of the 10th
Amendment of the GWB Consolidated version of the 10th Amendment to the German Act against Restraints of Competition,
see German Competition Act 2021—Unofficial Translation, https://www.d-kart.de/wp-content/uploads/2021/01/GWB-
2021-01-14-engl.pdf.
2. Proposal for a Regulation of the European Parliament and of the Council on contestable and fair markets in the digital
sector (Digital Markets Act) (hereinafter “DMA Proposal”). COM/2020/842 final.
3. A new pro-competition regime for digital markets—Advice of the Digital Markets Taskforce (hereinafter “Advice of the
Digital Markets Taskforce”); A new pro-competition regime for digital markets—Consultation document July 2021. CP
489 (hereinafter “DCMS/BEIS Consultation Document”).
4. H.R.3816—American Choice and Innovation Online Act (hereinafter “ACIO Act”) 2021, 117th Congress (2021–2022);
H.R.3825—Ending Platform Monopolies Act (hereinafter “EPM Act”) 2021, 117th Congress (2021–2022); H.R.3826—
Platform Competition and Opportunity Act (hereinafter “PCO Act”) 2021, 117th Congress (2021–2022); H.R.3849—
ACCESS Act (hereinafter “ACCESS Act”) 2021, 117th Congress (2021–2022). H.R.3843—Merger Filing Fee
Modernization Act (hereinafter “MFFM Act)”, 2021, 117th Congress (2021–2022).
5. For instance, the U.S. proposals foresee an important role of the U.S. court system in enforcing the new rules, whereas the
enforcement of the E.U., U.K., and German rules is largely within the competence of administrative authorities. Monika
Schnitzer et al., International Coherence in Digital Platform Regulation: An Economic Perspective on the US and EU
Proposals (2021), at 12, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3923604.
6. DMA Proposal, supra note 2, art. 3 (1).
7. Advice of the Digital Markets Taskforce, supra note 3, paras. 4.7–4.12.
8. ACCESS Act, supra note 4, s. 5 (6); EPM Act, supra note 4, s. 5 (4); PCO Act, supra note 4, s. 3 (d); ACIO Act, supra note
4, s. 2 (d) and (g) (4).
9. Competition Law 4.0, supra note 1, s. 19a (1) in conjunction with s. 18 (3a).

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