Will the DMA Deliver on its Promises? Part I: Substantive Aspects (or Markets Do Not Become Contestable by Decree)?

By: Pablo Ibañez Colomo (Chilling Competition)

As the legislative train carries on its journey towards the adoption of the Digital Markets Act (DMA), academics, stakeholders and consultants have produced a great deal of work examining how the future regime can be improved and made more effective, whether from an institutional or a substantive standpoint.

One of the questions that is far less prominent in these debates is whether the DMA can actually deliver on its promises. Put differently: is it realistic to expect that the regime will achieve every one of its ambitious aims? It seems to me that this question is, at the end of the day, more relevant. Achieving the optimal design of the regime would be a futile effort if it appears that it is expected to achieve an impossible task.

A regime that promises what it will be exceedingly unlikely to deliver is bound to create frustration (and even the false impression that failure is not a function of the regime’s structural inability to achieve its aims, but rather the regulator’s lack of willingness to meaningfully enforce it).

Against this background, I thought it might be a good idea to start a debate along the abovementioned lines, if only because managing expectations about what regulation can and cannot achieve is always a good idea.

The DMA is not particularly explicit about how it intends to transform digital markets. Contestability and fairness are, in this sense, more high-level aspirations than operational principles. Beneath Articles 5 and 6, I identify the following three goals (which I discussed in this paper of mine too):

Address the risk of leveraging from bottleneck segments to neighbouring ones: this is a traditional goal in competition law and sector-specific regulation (think of telecoms regimes, for instance). The idea is simple: ex ante intervention seeks to avoid the possibility of the extension of dominant position from one market to adjacent ones….