You Can (Try to) Keep The Economists Out of The DMA But You Cannot Keep Out The Economics

The Digital Markets Act (“DMA’) will impose far-reaching obligations on some large technology firms operating in the European Union. The DMA’s definitions and obligations are designed to bite without effects-based analysis. Thus, the hope is to bypass the length and risk of traditional antitrust proceedings. We argue that this procedural goal will likely be missed. By being intentionally vague the DMA will invite challenges, both on gatekeeper designation and obligations, that can only be resolved through economic analysis. We argue that enforcers need to use soft law and guidelines effectively to achieve the goal of minimizing procedural delay due to “battles” between opposing economic experts.

By Philip Hanspach & Magdalena Viktoria Kuyterink^[1]

The European Union’s Digital Markets Act (“DMA”) is a big policy bet against the tech giants.^[2] Its critics point at arbitrary thresholds to identify gatekeepers, vague and contradictory obligations, and the lack of an efficiency defense for regulated parties. The proponents of the DMA accept potential inefficiencies with a shrug and reply: “Do you want economists to drag you through endless econometrics and modeling exercises?” Avoiding costs in terms of time, money, and agency resources associated with economic analysis seems to be an important reason why the DMA was designed the way it was.

Enforcers in the current antitrust system are sometimes exhausted with the perseverance with which defenda