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TOTM It’s been an eventful two weeks for those following the story of the European Union’s implementation of the Digital Markets Act. On April 18, the . . .
It’s been an eventful two weeks for those following the story of the European Union’s implementation of the Digital Markets Act. On April 18, the European Commission began a series of workshops with the companies designated as “gatekeepers” under the DMA: Apple, Meta, Alphabet, Amazon, ByteDance, and Microsoft. And even as those workshops were still ongoing, the Commission announced noncompliance investigations against Alphabet, Apple, and Meta. Finally, the European Parliament’s Internal Market and Consumer Protection Committee (IMCO) held its own session on DMA implementation.
Many aspects of those developments are worth commenting on, and you can expect more competition-related analysis on Truth on the Market soon. Here, I will focus on what these developments mean for data privacy and security.
Read the full piece here.
Popular Media On March 4, 2024, the European Commission fined Apple €1.84 billion “over abusive App store rules for music streaming providers”.1 In particular, the Commission was concerned . . .
On March 4, 2024, the European Commission fined Apple €1.84 billion “over abusive App store rules for music streaming providers”.1 In particular, the Commission was concerned about the anti-steering provisions that Apple imposed on these providers. Although the full decision has not yet been published (I am told it could be a matter of months), the public information underpinning this decision is already interesting on several levels. In the following, I explore the good (1.), the bad (2.), and the ugly (3.) of the “App Store Practices (music streaming)” decision based on the information available as of this writing.
TOTM With Monday’s oral arguments in Murthy v. Missouri, we now have more of a feel for how the U.S. Supreme Court appears to be considering . . .
With Monday’s oral arguments in Murthy v. Missouri, we now have more of a feel for how the U.S. Supreme Court appears to be considering the issues of social-media censorship—in this case, done allegedly at the behest of federal officials.
In the International Center for Law & Economics’ (ICLE) amicus brief in the case, we argued that the First Amendment protects a marketplace of ideas, and government agents can’t intervene in that marketplace by coercing social-media companies into removing disfavored speech. But if the oral arguments are any indication, there are reasons to be skeptical that the Court will uphold the preliminary injunction the district court issued against the government officials (later upheld in a more limited form by the 5th U.S. Circuit Court of Appeals).
TOTM If you live in Europe, you may have noticed issues with some familiar online services. From consent forms to reduced functionality and new fees, there . . .
If you live in Europe, you may have noticed issues with some familiar online services. From consent forms to reduced functionality and new fees, there is a sense that platforms like Amazon, Google, Meta, and Apple are changing the way they do business.
Many of these changes are the result of a new European regulation called the Digital Markets Act (DMA), which seeks to increase competition in online markets. Under the DMA, so-called “gatekeepers” must allow rivals to access their platforms. Having taken effect March 7, firms now must comply with the regulation, which explains why we are seeing these changes unfold today.
Scholarship Abstract Courts and legislatures have suggested that classifying social media as common carriers would make restrictions on their right to exclude users more constitutionally permissible . . .
Courts and legislatures have suggested that classifying social media as common carriers would make restrictions on their right to exclude users more constitutionally permissible under the First Amendment. A review of the relevant statutory definitions reveals that the statutes provide no support for classifying social media as common carriers. Moreover, the fact that a legislature may apply a label to a particular actor plays no significant role in the constitutional analysis. A further review of the elements of the common law definition of common carrier reveals that four of the purported criteria (whether the industry is affected with a public interest, whether the social media companies possess monopoly power, whether they are involved in the transportation and communication industries, and whether social media companies received compensating benefits) do not apply to social media and do not affect the application of the First Amendment. The only legitimate common law basis (whether an actor holds itself out as serving all members of the public without engaging in individualized bargaining) would again seem inapplicable to social media and have little bearing on the First Amendment. The weakness of these arguments suggests that advocates for limiting social media’s freedom to decide which voices to carry are attempting to gain some vague benefit from associating their efforts with common carriage’s supposed historical pedigree to avoid having to undertake the case-specific analysis demanded by the First Amendment’s established principles.
TOTM Following Monday’s announcement by the European Commission that it was handing down a €1.8 billion fine against Apple, Spotify—the Swedish music-streaming service that a decade ago lodged . . .
Following Monday’s announcement by the European Commission that it was handing down a €1.8 billion fine against Apple, Spotify—the Swedish music-streaming service that a decade ago lodged the initial private complaint that spawned the Commission’s investigation—published a short explainer on its website titled “Fast Five Facts: Facts that Show Apple Doesn’t Play Fair.” The gist of the company’s argument is that Apple engages in a series of unfair and anticompetitive practices. In this piece, we put some of these claims to the test.
TOTM The EU’s Digital Markets Act (DMA) will come into effect March 7, forcing a handful of digital platforms to change their market conduct in some . . .
The EU’s Digital Markets Act (DMA) will come into effect March 7, forcing a handful of digital platforms to change their market conduct in some unprecedented ways. The law effectively judges them guilty (with a very limited, formalistic trial), and brands them “gatekeepers” based purely on size. It then sentences them to far-reaching, one-size-fits-all antitrust-style remedies in pursuit of the stated objectives of “fairness” and “contestability.” We’ll soon begin to see what that looks like in practice, and whether innocent conduct will be caught in the crossfire.
TOTM Just days before the EU’s Digital Markets Act (DMA) was set to enter into force, the European Commission hit Apple—one of the six designated “gatekeepers” . . .
Just days before the EU’s Digital Markets Act (DMA) was set to enter into force, the European Commission hit Apple—one of the six designated “gatekeepers” to which the new law will apply—with a hefty €1.8 billion fine for the kinds of anti-steering provisions that will be banned by the DMA, which enters into force on 6 March.
The timing of the fine, and its seemingly arbitrary amount, are both curious. Announced as being the result of a four-year investigation, the decision amounts to an exclusionary-abuse turned exploitative-conduct case, and is underpinned by a flimsy theory of harm in a market that has seen exponential growth over the past decade. The fact that the Commission fined Apple for conduct that would be banned per se just two days later raises questions as to why the DMA was necessary and whether the Commission has faith in the new law’s effectiveness.
Scholarship Abstract The Supreme Court’s landmark decision in Ohio v. American Express (“Amex”) remains central to the enforcement of antitrust laws involving digital markets. Specifically, the . . .
The Supreme Court’s landmark decision in Ohio v. American Express (“Amex”) remains central to the enforcement of antitrust laws involving digital markets. Specifically, the decision established a framework to assess business conduct involving transactional, multisided platforms from both an economic and legal perspective. At its crux, the Court in Amex integrated both the relevant market and competitive effects analysis across the two distinct groups who interact on the Amex platform, that is, cardholders and merchants. This unified, integrated approach has been controversial, however. The primary debate is whether the Court’s ruling places an undue burden on plaintiffs under the rule of reason paradigm to meet its burden of production to establish harm to competition. Enter Epic v. Apple (“Epic”): a case involving the legality of various Apple policies governing its iOS App Store, which, like Amex, is a transactional, multisided platform. While both the district court and the Ninth Circuit largely ruled in favor of Apple over Epic, these decisions are of broader interest for their fidelity to Amex. A careful review of the decisions reveals that the Epic courts operationalized Amex in a practical, sensible way. The courts did not engage in extensive balancing across developers and users as some critics of Amex contended would be required. Ultimately, the courts in Epic (a) considered evidence of effects across both groups on the platform and (b) gave equal weight to both the procompetitive and anticompetitive effects evidence, which, this Article contends, are the essential elements of the Amex precedent. Relatedly, the Epic decisions illustrate that the burden of production on plaintiffs in multisided platform cases is not higher than in cases involving regular, single-sided markets. Additionally, both parties, whether litigating single-sided or multi-sided markets, are fully incentivized to bring evidence to bear on all aspects of the case. Finally, this Article details how the integrated Amex approach deftly avoids potential issues involving the out-of-market effects doctrine in antitrust, which limits what type of effects courts can consider in assessing conduct.
Read at SSRN.
