EU Regulators Want Broader Rules on Corporate Market Power

EU regulators want comprehensive rules defining the market power of companies, with more weight given to innovation and indicators of what digital markets are, the European Commission said on Tuesday, due in part to the growing power of tech giants.

The rules, known as the EU market definition notice, date back to 1997 and help regulators measure a company’s pricing power in a merger or its ability to exclude competitors in an antitrust case.

The information can help regulators decide whether to seek approval from the company. Businesses and academics have in recent years criticized the EU’s antitrust laws as insufficient, particularly in relation to deals involving US tech giants and market forces.

After feedback from more than 100 stakeholders, the EU official proposed further additions to the rules.

This includes a greater emphasis on non-value factors such as innovation and quality of products and services and new guidelines that define digital markets as multi-dimensional markets and digital eco-systems where products are built around a mobile operating system.

In markets that are expected to undergo structural changes, such as technological or regulatory changes, the rules will take a forward-looking approach, the Commission said.

There will be a need for policies that specify how markets should be evaluated where companies compete for innovation, including pipeline products. This feature mainly targets pharmaceutical companies.

Interested parties have until January 13 to provide feedback before the Commission finalizes its proposals and adopts the new rules in the third quarter of 2023.

© Thomson Reuters 2022