The European Union’s proposed Digital Markets Act will attempt to control online gatekeepers by subjecting them to a wider range of upfront constraints.
New approaches and new tools are needed to prevent excessive concentration of economic power in the hands of a few matchmaking digital platforms that form multi-sided markets. Regulation in this area is only just emerging.
The market power of online platforms raises concerns that they may engage in anti-competitive practices, but traditional (ex-post) antitrust intervention will be less effective in markets driven by network effects unless it is combined with a proper (ex-ante) regulatory framework. Intervention should not reduce value creation, should focus on fair sharing of value, and should eliminate incentives for anti-competitive strategies.