Germany sets up body to lead modernisation of competition law

Posted by Out-Law

Germany sets up body to lead modernisation of competition law

By Michael Reich

A new body tasked with proposing reforms to competition law to better support digital companies based in Europe has been set up by the German government.

The Commission Competition Law 4.0 was set up by the Ministry for Economic Affairs. It has been asked to prepare “concrete recommendations for action on European competition law” by autumn 2019.

The mandate for the Commission’s work said: “American and Asian internet services dominate the markets. The seven most valuable companies of the world are digital platform companies from America and China. In the medium and long term, structural reforms are necessary, that secure Europe’s position and competitiveness especially in the digital markets at international level and that secure at the same time our economic and social prosperity.”

According to the Commission’s mandate, the body will assess European competition law and make recommendations to address nine specific questions.

It will look to answer whether fundamental changes in the competition framework are required to enable internationally competitive digital companies in Germany and Europe, and how European competition law could take into account the scaling and cooperation needs of German and European digital companies in a better way.

In addition, the Commission will assess whether competition law should be adapted to support cooperation and standardisation efforts, including in the context of ‘industry 4.0’ – the term coined in Germany to describe the fourth industrial revolution that is seeing the latest technologies modernise manufacturing.

The Commission will also look at whether new competition laws are needed to regulate access to data and how the development of a competitive data economy can be aligned with the requirements of data protection law.

The role competition rules have to play in driving innovation and investment in new technologies, such as artificial intelligence, will also be considered, and the Commission is also expected to look at whether changes in contract law are needed to account for the increasing use of algorithms and AI for example for ‘matching’ and ‘ranking’ purposes as well as for dynamic pricing to ensure markets remain fair and competitive.

The Commission has also been asked to look at how competition rules for “powerful platform companies” could be developed and whether procedural changes are needed to enable regulators to better respond to “dynamically changing digital market platforms and companies”.

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