Introduction to Digital Markets
Why and how is BEREC involved in the regulation of Digital Markets?
Electronic Communication Services (ECS) and Electronic Communication Networks (ECN), which are regulated by members of the Body of European Regulators for Electronic Communications (BEREC), are part of a vast internet ecosystem that allows users and society, as a whole, to offer and benefit from the extraordinary potential of a large variety of services provided via the internet. In recent decades, large digital platforms and Content and Application Providers (CAP) have become prominent actors in the internet ecosystem: they provide internet-based services, platforms and infrastructures related to a significant variety of different elements in the internet ecosystem (from applications to internet access networks) and have gained a position that allows them to shape both the competition dynamics on different markets and the conditions under which content, services and information can be accessed and shared.
In this context, the internet experience for users is affected by many different elements, such as devices, operating systems and application stores, which are not directly within the National Regulatory Authorities (NRA) and BEREC’s regulatory realm but can still have an impact on ECNs and ECSs, which are subject to the NRAs’ monitoring and regulation.
BEREC has largely contributed to shaping the regulation of large digital platforms and, more generally, to the analysis of the internet ecosystem, e.g. with the BEREC Report on the Data Economy, the BEREC Report on the ex ante regulation of digital gatekeepers, the competition dynamics and openness in the BEREC Report on the Internet Ecosystem, the BEREC High-Level Opinion on the EC’s proposal for a Data Act, the analysis of the entry of large CAPs into the markets for ECNs and ECSs and so on.
Moreover, BEREC plays a relevant role in the High-Level Group for the enforcement of Regulation (EU) 2022/1925 of the European Parliament and of the Council on contestable and fair markets in the digital sector – the Digital Markets Act (DMA) – and some BEREC members will be involved in the implementation of some new European Union (EU) regulations targeting digital platforms, such as for instance the Regulation (EU) 2022/2065 of the European Parliament and of the Council on a Single Market For Digital Services – the Digital Services Act (DSA) – and the Data Act.
Why does the EU regulation of Digital Markets and Services matter?
Digital platforms have increasingly become key actors in the European economy, in supporting social interaction and citizen participation. They have brought important benefits in terms of innovation, consumer choice and a wide range of efficiencies by reducing transaction, search and distribution costs for consumers and businesses.
Notwithstanding, given economic specificities (such as economies of scale and scope and networks effects) and by providing an ecosystem of services and products, some large digital platforms have the possibility and may have the incentive to leverage their market power and engage in unfair practices that can undermine contestability and negatively impact businesses and users.
Therefore, it is essential to have a good understanding of the competition dynamics among the different players in the internet ecosystem (their position, role and practices), of its evolution and its impact on the traditional electronic communication markets, and on internet openness and users’ choice/experience.
In this context, the new European regulations such as the DMA, the DSA and the Data Act are very important. They introduce rules for digital platforms and intermediary services that aim to make the digital space safer, fairer and more contestable and to make key inputs like data available for use in line with EU rules and values.
In addition, BEREC keeps monitoring and analysing the evolutions in the internet ecosystem, particularly in markets that are significantly impacted by those practices of the gatekeepers and which may not be addressed by the current legislative initiatives.