Participation of third parties in the public enforcement of the Digital Markets Act: between democracy and technocracy

Abstract

1. INTRODUCTION

The Digital Markets Act (DMA) is a landmark regulatory tool, which forms one of the building blocks of the EU’s emerging digital constitution to rein in the concentration of corporate power in the digital internal market.¹ By laying down an abundance of legal rules that ensure the contestability and fairness of digital markets where ‘gatekeepers’ are present, the DMA aims to contribute to the proper functioning of the internal market² and simultaneously delineates the boundaries of technological and economic power emerging in the digital environment.

However, ensuring contestability and fairness for digital markets is not an objective of the DMA in itself, but rather a means to produce beneficial effects for ‘the Union’s economy as a whole’ and ‘ultimately the Union’s consumers’.³ By constraining the corporate power of gatekeepers, it is to (re)-activate competition and restore contestability in digital markets.⁴ By promoting dynamic digital markets, the DMA benefits business users, who depend on gatekeepers to offer their services in the single market. It supports innovators and technology start-ups with new opportunities to compete and innovate in the online platform economy without having to comply with unfair terms and conditions limiting their development. Ultimately, it protects consumers who will be able to enjoy improved services, more opportunities to switch their provider direct access to services, and fairer prices. These public interests—ensuring contestability and fairness for digital markets for the benefit of ‘the Union’s economy as a whole’ and ‘ultimately the Union’s consumers’—determine the legal mandate of the Commission, as the EU’s administrative decision-maker,⁵ and should form its core point of reference for enforcing the DMA. Accordingly, when the Commission applies the DMA to specific facts and circumstances, it concretizes the public interests envisaged in the DMA’s legal norms.⁶ In doing so, the Commission’s decision-making and assessment must be aligned with the fulfilment of these public interests.⁷

However, while the current legal framework of the DMA’s application heavily relies on participation of third parties (business users, consumers, civil society organizations, and every legal or non-legal who is not a designated gatekeeper), it quite paradoxically does not grant them any formal role for them, in either its supervision or enforcement mechanisms, and limits their participation rights to those of passive informants. The lack of such a formal role means that third parties cannot demand a formal reasoned decision from the Commission, as sole enforcer of the DMA, if their submission is not dealt with by the regulator. Moreover, in the limited situations where their participation is made possible, the fate of third parties remains highly dependent on the Commission’s administrative discretion. This is also true for private enforcement, which is an avenue third parties could pursue after the Commission has designated a gatekeeper pursuant to a designation decision.⁸

While third parties’ participation is instrumental to the success of various stages of the Commission’s supervision (including gatekeepers’ compliance) and enforcement actions, it remains informal without imposing a duty on the Commission to give reasons if their submission is not dealt with. Their participation is based on the functional rationale for addressing asymmetries in competence and information and enhancing efficient policymaking and enforcement to sort out social complexities in highly technical areas. Their limited and informal participation is justified by the Commission’s priority for efficient and swift decision-making in dealing with complex technical assessments in dynamic digital markets.⁹

While the DMA’s current enforcement framework can be justified by the need for procedural efficiency to accurately deal with technically complex issues in digital markets, the lack of formal participation for third parties raises concerns about the legitimacy, transparency, and accountability of the Commission’s administrative decision-making.

Formal participation and complaints serve various functions in administrative procedures which provide the foundation of efficiently functioning and legitimate administrative decision-making in any modern democratic polity. They not only provide relevant information and assist administrative authorities in monitoring the good functioning of markets, but their participation fulfils an important aspect of transparency and accountability that enhances the legitimacy of the proceedings and the final decision-making. Formal participation of complainants is an essential oversight mechanism scrutinizing the administrative authority’s use of discretionary powers, and, hence, functions as a complement to judicial review: third parties are given the opportunity to contradict the possible decision of the competition authority, invoking errors, flaws, or mistakes that could ultimately lead to the illegality of the final decision.

Moreover, third parties who are likely to be adversely affected by the outcome of the Commission’s administrative decision-making must be guaranteed a reasonable degree of participation in such decision-making to protect their subjective interests.¹⁰ Their participation concerning possible non-compliance or infringements of the DMA by the gatekeeper in question is normatively justified by the premise that such procedures need to be guided by the public interests that the DMA aims to pursue.

The current position of third parties in the application of the DMA differs from their position in the enforcement of EU competition law, such as Articles 101 and 102 TFEU, and merger control, where third party participation in public enforcement proceedings was legislated and which subsequently gained constitutional value through the EU courts’ case law and facilitated in various pieces of legislation.¹¹ These procedures formed the archetype of administrative procedures in EU law and constitutionalized a number of key procedural guarantees such as the right to access to information.¹² Although the DMA relies heavily on precedents and practices applicable in these substantive parts of EU competition law, this, quite remarkably, is not the case concerning third party participation.

By introducing a highly centralized enforcement regime, the DMA enables the Commission to intervene in a fast and anticipatory manner without having to engage in the legal and factual complexity that lengthy investigations demand.¹³ This is understandable in light of the fact that the DMA aims to complement the EU competition rules, which are considered difficult to apply in a fast and effective way in digital markets due to various constraints that structure and precondition its enforcement.¹⁴ Nevertheless, the DMA’s narrow focus on fast and efficient supervision and enforcement leaves the democratic rationale of a participatory model of administrative decision-making and the rule of law requirements of transparency and accountability aside, thereby restricting third parties’ access to justice and effective judicial protection in the Commission’s decision-making.

Against this background, this article will analyse the current public enforcement framework of the DMA by focusing on the participation of third parties. In Section 2, the article discusses the public interests that underpin the DMA’s legal framework and should guide the Commission’s decision-making and public enforcement. Section 3 unpacks the unique regulatory framework of public enforcement under the DMA. We analyse the nature and structure of the enforcement framework and assess the role of third parties in the various enforcement and supervision mechanisms. We find that the various enforcement and supervisory mechanisms of the DMA were designed in a way that mostly recognize third parties’ role as passive informants without granting them any specific participation rights. These mechanisms leave wide discretionary powers to the Commission in deciding whether third parties can access and participate in the Commission’s supervision and decision-making processes. In Section 4, by making a comparison with third parties’ participation rights under Regulation 1/2003 and Regulation 139/2004, we analyse the incongruity between the public interests underlying the substantive rules of the DMA and the way its enforcement has been structured. In Section 5, we explain the general rationale of third parties’ participation in administrative proceedings, and in the Commission’s competition law proceedings in specific. By doing so, we highlight the constitutional role such participation fulfils as a central aspect of transparency and accountability of administrative law procedures and explain how these values can, and should be balanced with the need for speedy decision-making and procedural efficiency. Finally in Section 6, we discuss three different procedural avenues that could serve as alternative routes for third parties to protect their economic interests that are affected by gatekeepers’ practices. We find the possibility to file complaints with the European Ombudsman the most promising avenue, while recognizing that it cannot fully compensate the shortcomings of the DMA’s current enforcement design. We close with conclusions.

2. THE PUBLIC INTERESTS UNDERLYING THE DMA: BENEFIT BUSINESS USERS AND END-USERS

The primary aim of the DMA has often been designated in ensuring contestability and fairness for digital markets where ‘gatekeepers’ are present, to the benefit of business users and end-users of core platform services. The recitals to the DMA reveal that the DMA takes as its ultimate goal to produce beneficial effects for ‘the Union’s economy as a whole’ and ‘ultimately the Union’s consumers’.¹⁵ While the DMA may not create entitlements for third parties,¹⁶ it aims to benefit business users, who depend on gatekeepers to offer their services in the single market and protects end-users who will enjoy improved and a wider range of services to choose from, more opportunities to switch their provider if they wish so, direct access to services, and fairer prices.¹⁷

By constraining the corporate power of gatekeepers, the DMA’s goal is to reinstate competition and restore contestability in digital markets.¹⁸ By promoting dynamic digital market, the DMA benefits business users, who depend on gatekeepers to offer their services in the single market. In this day and age, online platforms play an indispensable role in the digital internal market. Operators of online platforms provide ‘core platform services’, which enable business and end-users to be easily reached, intermediated, and connected to one another throughout the entire EU. Core platform services are key to the functioning of the digital economy, but simultaneously enable providers of such services to easily exploit the characteristics inherent to digital markets, such as extreme economies of scale, significant network effects, dependency of business users and end-users on the gatekeepers’ platforms, consumer lock-in effects, and data-driven advantages.¹⁹ Self-correcting mechanisms which can be relied on in more traditional markets have proven to be dysfunctional in digital markets: existing and potential competitors have little to no chance of successfully challenging gatekeepers, irrespective of the former’s efficiency or innovativeness.²⁰ Significant barriers to scaling and entry, particularly in terms of high investment costs and inaccessibility of valuable input such as consumer data, prevent (potential) competitors from effectively exercising competitive constraints on the undertakings in question.²¹ As a result of their incontestability, gatekeepers have acquired and consolidated market power and superior bargaining power, which they tend to exploit in their relations with business users through unfair trading practices in digital markets.²²

Against this background, the unique regulatory framework of the DMA has been introduced to deliver on the Union legislator’s promise to make markets in the digital sector contestable and fair. Accordingly, with the introduction of DMA, the Union legislator has subjected gatekeepers that provide core platform services and are designated pursuant to Article 3 DMA, to various ex-ante obligations, overstepping of which is deemed to be illegal per se.²³ Many of the obligations under Articles 5, 6, and 7 DMA were inspired by prior or pending public enforcement actions concerning other parts of EU competition law, in particular Article 102 TFEU.²⁴ In one view, the DMA has largely transformed ex-post obligations into ex-ante obligations, which are to apply alongside provisions of EU competition law.²⁵

DMA intends to remedy the structure of the digital markets, while EU competition law merely focuses on the conduct of certain undertakings operating within those markets.²⁶

The DMA’s substantive rules, and how the provisions will be implemented and enforced, have already been extensively discussed.²⁷ However, the nature and degree of third parties’ participation, in the various enforcement mechanisms under the DMA has not been investigated in depth. This question is, however, crucial. Not only does it touch upon third parties’ access to justice and effective judicial protection in the Commission’s decision-making process, but it also functions as a check on the legitimacy of the Commission’s decision-making and its compliance with the rule of law and principles of good administration.²⁸

While knowledge-based decision-making is indispensable in modern democracies, expert and technocratic decision-making cannot be decoupled from traditional democratic procedures of representation, scrutiny, and accountability.²⁹ Accordingly, modern governments’ and the Commission’s demand for knowledge must be balanced with the demand for democratic legitimacy,³⁰ striking a balance between independent expert decision-making and democratic accountability.

As the following sections will explain, while third parties do not intervene as defendants, they have an interest in the outcome of the procedure: the ensuing decisions might affect their economic interests, even if not always in a direct way. Hence, they should be able to participate in the administrative procedure in order to protect their economic interests. In the next sections, we unpack the unique enforcement framework of the DMA, and critically assess the role that third parties can play in the various public enforcement mechanisms of this landmark regulatory tool.

3. THE UNIQUE FRAMEWORK OF PUBLIC ENFORCEMENT OF THE DMA

The Union legislator has intended that compliance with the DMA, to be primarily to be secured through public enforcement by the Commission. It has opted for a highly centralized model of enforcement, under which the Commission has been granted the exclusive competence to monitor the implementation and the enforcement of the Regulation. Similar to the enforcement mechanism laid down in Regulation 139/2004 for concentrations with a Union dimension, the principle of a ‘one-stop shop’ creates a single point of reference concentrated in the hands of the Commission, as the ‘sole enforcer’ of the DMA.³¹

The choice for a one-stop shop principle has been justified by reference to the fact that gatekeepers operate cross-border, often on a global level. Under such circumstances, enforcement on EU level is believed to yield better results than enforcement by 27 national authorities assessing the same conduct, all with their own political priorities and varying economic incentives.³² As such, a one-stop shop principle is deemed to be of crucial importance to avoid fragmentation within the internal market, for example due to the diversity of national laws on abuse of dominance³³ and justifies the use of Article 114 TFEU as the legal basis for the DMA.³⁴

For the aforementioned reasons, the enforcement by national competition authorities (NCAs) is limited to specific parts of the investigations initiated on the basis of the DMA.³⁵ National authorities may investigate into breaches of the DMA, but cannot initiate enforcement actions on their own.³⁶ Furthermore, once the Commission decides to open proceedings pursuant to the DMA, national authorities will be relieved of the possibility to pursue such investigations.³⁷ While the DMA established specific rules on the cooperation between the Commission and national authorities, these remain narrowed down to assist the Commission in enforcing the DMA, leaving few incentives for national authorities to pursue their role as enforcers since they are to be a mere auxiliary tool for the Commission.³⁸

While the enforcement of the DMA draws on administrative procedures known from EU merger control and Articles 101 and 102 TFEU, it is a unique regulatory framework based on pro-active, highly discretionary, ex-ante enforcement by the Commission complementing its ex-post enforcement of competition law. It has been praised for its innovative elements built on responsive regulation and following a cooperative and participative approach in order to allow the Commission to intervene in a dynamic, flexible, and responsive way when necessary.³⁹ It is in this context that the DMA adds a novel layer of enforcement: that of a supervisory mechanism to monitor compliance of the designated gatekeepers with the DMA’s obligations.⁴⁰

This supervisory mechanism foresees a nearly exclusive interplay between the Commission and designated gatekeepers.⁴¹ Hence, together with the one-stop shop principle, this interplay reflects an unprecedented concentration of enforcement powers in the hands of the Commission since Regulation 17/62 was implemented.⁴² In this framework, third parties have an important but facilitative role, that is instrumental to the Commission’s supervision of gatekeepers’ compliance with the DMA provisions.

In this setting, third parties merely have informal avenues of participation in various stages of the Commission supervision and enforcement mechanisms, as will be discussed in the next section.

The nature and structure of public enforcement of the DMA

Procedures, and in particular administrative procedures, are the foundation of efficiently functioning and legitimate modern democratic polity. In the EU, procedural frameworks are essential for the effective implementation, application and enforcement of EU law.

The public enforcement framework of the DMA is structured around the relationship of the Commission and gatekeepers, and hence, both the DMA and its Implementing Regulation contain clear procedural rights for gatekeepers.

Beyond the stage of supervision and compliance, the more classical enforcement framework of the DMA is very similar but not identical to the administrative procedures under the Merger Regulation, as well as to the procedures to enforce Articles 101 and 102 TFEU as laid down under Regulation 1/2003. However, under Articles 101 and 102 TFEU, undertakings self-assess their conduct, and the Commission may only, in an ex-post manner, investigate their conduct. In merger proceedings, parties need to notify their transactions ex-ante to the Commission for review and may only implement their transaction after the Commission’s approval.⁴³ Under the DMA, designated gatekeepers similarly need to engage in self-assessment and report ex-ante on how they are complying with the obligations laid down in the DMA.⁴⁴

The way in which procedures are structured is important as administrative decisions may seem legal, because they are technically accurate, rational, and objective but their structure may implicitly favour a certain composition of public interests that disregard other (albeit private or public) interests that should have been taken into consideration.⁴⁵ Under the DMA, the Commission conducts complex technical assessments, which should be congruent with the fulfilment of the public interests that are, at the same time, at the core of administrative decision-making. In the case of the DMA, those public interests are the protection of third parties’ economic interests through ensuring contestability and fairness of digital markets.⁴⁶

In the next section, we analyse how the structure of supervision and enforcement mechanisms under the DMA defines the access and procedural rights of the different categories of actors that are concerned with the Commission’s decision-making. We focus on third parties, who could be business users, end-users or consumers, and whose economic interests are inherent to the protection of contestable and fair markets.

The participation of third parties in public enforcement of the DMA

Submission of comments

Under Article 8 DMA, the provision which places upon gatekeepers the burden of ensuring and demonstrating compliance with the obligations of Articles 5, 6, and 7 DMA, the Union legislator has foreseen a relevant but informal way of participation of third parties. Designated gatekeepers may, under Article 8 (3) DMA, request a regulatory dialogue with the Commission in order to obtain its views on the measures it intends to implement to ensure their compliance with Articles 6 and 7 DMA.⁴⁷

Pursuant to Article 8 (6) DMA, when the Commission communicates its observations to the gatekeeper following this dialogue, it is to publish a non-confidential summary of the compliance report and the measures that it intends to take or that it considers the gatekeeper should take. Within a reasonable timeframe set by the Commission, third parties may subsequently submit their comments on the Commission’s preliminary findings.⁴⁸

Related to the duty to demonstrate and ensure compliance with Article 8 DMA, a reporting obligation is placed on gatekeepers according to Article 11 DMA. This provision obliges gatekeepers to issue a compliance report to the Commission on at least an annual basis.⁴⁹ It has been argued that a proper design of the requirements of the compliance report will be crucial to ensure effective compliance with the DMA.⁵⁰ Moreover, these obligations place on gatekeepers an expectation that they engage in dialogue with third parties in order to effectively comply with the DMA.⁵¹ However, the governance structures of such dialogue have not yet been worked out in detail, beyond the expectation that third parties assist gatekeepers by providing feedback and their views on the proposed measures and, hence, in ‘producing compliant outputs’.⁵²

Compliance reports should be detailed enough in order to allow the Commission to effectively monitor gatekeeper compliance. Incomplete or low-quality reports may signal that a gatekeeper is not in compliance with its obligations, and, hence, may justify further investigation and the initiation of subsequent enforcement actions.⁵³

According to the Commission, compliance reports should be detailed and explicit enough for third parties to provide the Commission with feedback on any shortcomings. For collecting third-party feedback, the Commission organizes public stakeholder workshops where gatekeepers are asked to present their compliance reports to the public, and where the Commission receives input from third parties in order to remedy the existing information asymmetry with gatekeepers.⁵⁴

Several workshops have been organized over the past year, which allowed third parties to provide information concerning gatekeepers’ conduct for the Commission and to identify potential non-compliance issues. During such technical workshops, interested stakeholders can provide their views on specific issues and questions that may arise in relation to gatekeepers’ implementing measures that are to ensure effective compliance with the DMA.⁵⁵

Likewise, third parties may submit their comments on the preliminary findings of the Commission under its market investigation into systematic non-compliance as initiated pursuant to Article 18 DMA.⁵⁶ When the Commission is to publish a non-confidential summary of the case and the remedies that it considers imposing, third parties may submit their observations within the timeframe set by the Commission.⁵⁷ Additionally, when the Commission seeks to make the commitments offered by gatekeepers under Article 18 (6) DMA binding, it is required to publish a non-confidential summary of the case and the main content of the commitments that it considers to make binding pursuant to Article 25 DMA.⁵⁸ Again, interested third parties may submit their comments thereon within the timeframe set by the Commission.⁵⁹

In none of these cases is the Commission obliged to intervene on the basis of third parties’ comments. It has, however, been suggested that the Commission could issue guidelines to indicate what kind of submissions it welcomes and, according to which type of criteria it will assess these submissions.⁶⁰

Consultation

Additionally, during market investigations into new services and new practices pursuant to Article 19 DMA, there is a possibility for the Commission to consult with third parties.⁶¹ Importantly, these include business users and end-users who rely on the service in the digital sector which is under investigation, and business users and end-users who are subject to the practices under investigation. Similarly, when the Commission intends to adopt a decision pursuant to Article 29 DMA, which entails the finding that a gatekeeper has not complied with its obligations under the DMA—otherwise known as the ‘non-compliance decision’—it may consult third parties.⁶² However, in its proceedings, on the basis of Articles 19 and 29 DMA, the possibilities for third party participation rest on a discretionary assessment by the Commission. There is no obligation on the Commission to consult with third parties under either market investigations pursuant to Article 19 DMA or in the process of issuing a non-compliance decision pursuant to Article 29 DMA.

Finally, Article 27 DMA foresees a more pronounced role for third parties in the public enforcement proceedings initiated by the Commission. According to Article 27 (1) DMA, any third party, including business users, competitors, or end-users of core platform services designated pursuant to Article 3 DMA, may inform either the Commission or NCAs about any practice or any behaviour by gatekeepers that falls within the scope of the DMA.⁶³ However, neither the Commission nor the NCA in question is obliged to follow up on such information. According to Article 27 (2) DMA, both institutions will have full discretion as to how they proceed with the information that has been provided to them.⁶⁴

Whistleblowing

Lastly, the recent DMA Whistleblower Tool⁶⁵ allows individuals with inside information to make anonymous, or attributed submission to the Commission, and offers a secure avenue for reporting wrongful practices by gatekeepers.

However, it again limits third parties’ participation to that of passive information providers without formal participation rights.

A summary of third parties’ participation in the public enforcement of the DMA is presented in Supplementary Table I.

Overall, in the procedures of the DMA, third parties may provide information, but do not enjoy participatory rights, such as the right to submit formal complaints, the right to a reasoned decision, right to access to key documents, or the right to be present at hearings.⁶⁶

4. THE INCONGRUITY BETWEEN THE DMA’s GOALS AND ITS PUBLIC ENFORCEMENT: A COMPARISON WITH EU MERGER CONTROL

The above analysis shows that the DMA does not facilitate any formal role for third parties in its supervision and enforcement mechanisms. More precisely, their participation is highly dependent on the discretion of the Commission, and they cannot demand a formal reasoned decision if their submission is not dealt with. Third parties can neither request market investigations, and the accompanying Implementing Regulation, is limited to narrow issues of confidentiality.⁶⁷

Moreover, and while third parties can lodge private law actions before national courts, this is an avenue they will only be able to pursue dependent on prior action by the Commission.⁶⁸ Moreover, and as we explain in Section 6, the information that third parties gather as a participant in public enforcement proceedings, usually through their access to documents or participation in hearings, is crucial to substantiate claims in subsequent private enforcement actions.

Overcoming financial and practical burdens, such as accessing relevant information about the breach of EU law, is exactly the reason why third parties, especially for consumers, and consumer and civil society organizations need more formal participation and access to documents in the DMA’s public enforcement to be able to file private law claims.⁶⁹

This stands in contrast with the enforcement of EU competition law, such as that of Articles 101 and 102 TFEU, and merger control rules, where third party participation in public enforcement proceedings was legislated and entrenched with a constitutional underpinning in the EU courts’ case law and further facilitated through various pieces of secondary and tertiary legislation over the past decades.⁷⁰ These procedures provided the archetype of administrative procedures in EU law and constitutionalized key procedural guarantees such as the right to access to information.⁷¹ These procedural rules for the Commission’s direct administration of competition rules were also exceptional as they formed one of the few areas of EU law that were equipped with a comprehensive administrative framework from its very inception in 1962.⁷²

Although the DMA relies heavily on precedents and practices applicable in these substantive parts of EU competition law, this is, quite remarkably, not the case for third party participation in its enforcement framework. There are relevant justifications for the failure of establishing similar participatory rights for third parties under the DMA, which will be discussed below in Section 5.

Before moving on to the role of third parties in the enforcement of the DMA, a short discussion follows concerning the nature of third parties’ participation.

Administrative procedures for the enforcement of EU competition law

In administrative competition law procedures, third parties intervene in a different capacity than the undertakings under assessment. Third parties do not need to defend their personal legal sphere, since the procedure has not been initiated against them. They are ‘merely liable to suffer the incidental effects of the decision’.⁷³ The ‘different degree of intensity of the harm caused to their interests’—the criterion that, according to the Court, allows for differentiation in the categories of persons concerned⁷⁴—places them in a different procedural position. Nevertheless, while third parties do not intervene as defendants, they have an interest in the outcome of the procedure: the ensuing decisions might affect their economic interests, even if not always in a direct way. Hence, they should be able to participate in the administrative procedure in order to protect their economic interests.⁷⁵

Administrative procedures for the enforcement of EU competition law have been conceived along a strictly bilateral scheme. The procedure gravitates around the relationship of the Commission and the undertaking targeted by the former’s investigations or supervision.⁷⁶ All other natural or legal persons concerned by the procedure are considered third parties, and intervene in different procedural qualities. This bilateral structure has been enshrined in the EU Treaties concerning state aid⁷⁷ and in EU regulations that have governed this matter since the outset of European integration.⁷⁸ This procedural model lays down a tripartite distinction between undertakings, holders of a ‘legitimate interest’ and holders of a ‘sufficient interest’. The undertakings or associations of undertakings under investigation have, as a matter of legal principle, a right to be heard before the decision concerning them is adopted. This right is today enshrined in Regulation 1/2003, Regulation 773/2004, and Regulation 139/2004 and is protected by the audi alteram partem principle, which is a general principle of EU law.⁷⁹

Very different is the legal status of persons who, while being potentially affected by the same decision, can participate in the procedure. Access to the procedure of persons other than the targeted undertakings is filtered by a discretionary assessment of their interest to participate, which we have discussed elsewhere at length.⁸⁰ In accordance with the bilateral structure of the procedure, the Courts have characterized the procedural rights of third parties as a right to be associated with the procedure. This can be generally designed as a right to participate in the administrative procedure, qualitatively different from the right to be heard as a right of the defence of the targeted undertakings.⁸¹

This adversarial conception of administrative procedures in EU competition law underlies the different roles granted to undertakings, complainants and third parties.

The procedural intervention of the undertakings whose possible anti-competitive conduct is being assessed is grounded on a ‘moral imperative’ of enabling them a defence before the adoption of a decision that expressly names them and may imperil their rights and interests as legal persons. Their right to be heard ensures that they are not ‘treated purely as an object’ of such administrative decision-making.⁸² In the next section, we make a comparison with administrative procedures under the Merger Regulation as its ex-ante enforcement framework resembles most closely the enforcement framework of the DMA.

A comparison with the Merger Regulation

Under the Merger Regulation 139/2004, third parties can contribute to the Commission’s investigation by means of replies to requests for information that have been issued according to Article 11 of the Merger Regulation. In doing so, third parties can provide information and comments they consider relevant for the assessment of a given transaction. DG Competition may also invite third parties for meetings to discuss and clarify specific issues that were raised.⁸³ This is similarly provided for in the DMA as discussed above in Section 3.

However, according to Article 18 (4) Regulation 139/2004, third parties who can demonstrate a sufficient interest shall be entitled, upon application, to be heard.⁸⁴ Article 18 (4) allows third parties to submit their written observations within a time limit that has been set by the Commission.⁸⁵ Having received the written observations by the third parties in question, the Commission may also afford them the opportunity to participate in a hearing.⁸⁶

Additionally, the Commission may, in the interest of the investigation, and in appropriate cases, provide third parties that have shown a sufficient interest with a non-confidential version of the Statement of Objections, in order to allow them to make their views known on the Commission’s preliminary assessment of the concentration.⁸⁷ However, the Commission retains full discretion in determining whether such third parties are indeed granted access to the Statement of Objections.⁸⁸ As a consequence, a right to access this document does not exist.⁸⁹ Hence, ‘the procedural rights of third parties are not as extensive as the rights granted to the interested persons in order to ensure their rights of defence’, yet ‘it is nevertheless the fact that, in so far as they show a sufficient interest, qualifying third parties have a right under Article 18(4) of Regulation No 4064/89 to be heard if they have so requested.’⁹⁰

While these procedural rights are limited, especially in comparison with the procedures laid down under Articles 101 and 102 TFEU,⁹¹ they still provide substantial procedural rights to third parties.

In comparison, the DMA lacks similar procedural rights for third parties and narrows them down to the possibility to contact the Commission or the competent authorities of the Member States, and inform them about various aspects of the gatekeeper’s conduct. However, the text of the DMA imposes no obligation on the Commission to take any action following a contact by a third party.

Hence, even the instrumental nature of third-party participation is filtered by the Commission’s discretionary assessment leaving them without any specific right or possibility to question the decision-maker. The pressure on the Commission to find speedy solutions in digital markets, and to overcome procedural constraints in ex-post enforcement, are among the most important arguments to justify the lack of formal procedural rights for third parties.

While excluding any formal participation by third parties is understandable in terms of keeping the procedure swift and efficient,⁹² it raises fundamental questions about the legitimacy of the decision-making of the Commission.

The choice not to include formal participatory rights for third parties is especially remarkable, in light of the fact that the legislative history reveals that several Members of the European Parliament (MEPs) have pleaded for the introduction of amendments to the Commission’s DMA proposal which would facilitate the rights of third parties to a greater extent, provided that such parties are able to demonstrate a ‘legitimate’ or ‘sufficient’ interest. Several MEPs proposed an amendment which would grant consumer organizations, business organizations, and other civil society organizations, or any other third party with a legitimate interest the right to submit complaints about gatekeepers violating their obligations pursuant to the DMA.⁹³ A similar amendment was suggested to allow natural or legal persons who can show a ‘legitimate interest’ the right to lodge complaints with regard to the non-designation of gatekeepers, and with regard to non-compliance and systematic non-compliance by gatekeepers with their obligations under the DMA.⁹⁴ Additionally, several MEPs pushed for an amendment that intended to grant parties demonstrating a ‘sufficient interest’ a right to be heard in the proceedings carried out under the DMA.⁹⁵

Despite these calls from MEPs and civil society organizations⁹⁶ to introduce participatory rights of third parties under the DMA, the Union legislator has chosen to adopt Article 27 DMA as it currently stands. Under Article 27 DMA, the role of third parties is reduced to that of mere informants.

In the next section, we examine the rationale of third parties’ participation in public enforcement proceedings and their participation as an important aspect of transparency and accountability in administrative law procedures.

5. RATIONALE OF THIRD PARTIES’ PARTICIPATION IN ADMINISTRATIVE PROCEDURES

In general, the participation of third parties in administrative law proceedings is grounded on the instrumental function of their intervention. Third parties may provide valuable information that can be relevant for the accurate representation of the factual situation, enabling the administrative authority to reach a materially correct decision in correspondence with the precision of the facts.⁹⁷ Hence, third parties’ participation functions as a collaboration with the administrative authority in its capacity as decision-maker, as third parties bring information into the administrative procedure that facilitates the task of assessing the factual situation under appraisal. Such information is relevant for the accuracy of the final choices by the decision-maker and for the concretization of the public interest.⁹⁸ This function is fully acknowledged in the enforcement and supervision mechanisms of the DMA.

However, third parties are not just important ‘watchdogs’ who can assist administrative authorities in monitoring the good functioning of markets. Their participation is an important aspect of transparency and accountability of administrative decision-making. Third parties’ participation is a complement to judicial review, because third parties are given the opportunity to contradict the possible decision of the competition authority, invoking errors, flaws, or mistakes which could ultimately lead to the illegality of the final decision.⁹⁹ As such, it enhances the legitimacy of the procedure and the final decision-making.

Through the filing of complaints, third parties provide administrative authorities with valuable information. Such information may be used as a source that allows administrative authorities to detect infringements of EU law more easily, or as a source of evidence that allows them to substantiate the grounds on which they impose penalties on the infringer in question.¹⁰⁰

Numerous examples show that third parties can assist competition authorities by providing knowledge and information about the day-to-day functioning of markets, in particular in mass-market consumer goods. They can do so through the submission of complaints and/or by initiating private enforcement actions before national courts. The Commission’s experience has shown that, in particular in non-cartel cases for which leniency is not available, third parties were an important tool to discover anti-competitive conduct. Most prominent examples in the decision-making practice of the Commission concerning Article 102 TFEU are Google Shopping,¹⁰¹  Microsoft¹⁰² and Telefonica¹⁰³ investigations. Similarly, in the decision-making practice of NCAs, important cases have been brought by complainants. For example, the Bundeskartellamt’s Amazon¹⁰⁴ and Facebook¹⁰⁵ investigations were informed by consumer complaints. BEUC, the European consumer organization, acted as an interested third party to the European Commission’s competition investigations into Google’s Android and the WhatsApp/Facebook merger cases.¹⁰⁶ With regard to Articles 101 and 102 TFEU, BEUC has reported how they, in the form of responses to ‘market tests’ in case the undertakings under investigation seek to offer commitments, have contributed to Commission investigations, for example, in Google Search (Shopping),¹⁰⁷  Amazon (e-books),¹⁰⁸  Amazon Marketplace, and Aspen (excessive pricing)¹⁰⁹ cases.

When third parties bring complaints before competition authorities, and participate in the respective administrative procedures, they contribute to the public enforcement pursued by the regulatory authorities deterring undertakings from law infringements and making them comply with the law. Hence, third party participation contributes to the effectiveness of public enforcement actions, by increasing its deterrent effects and the compliance of undertakings with EU law. In turn, third party participation in public enforcement proceedings can lead to an increase in subsequent private enforcement actions.¹¹⁰ When third parties bring damages claims before national courts,¹¹¹ the information that they gather as a participant in public enforcement proceedings, usually through their access to documents or participation in hearings, is crucial to substantiate claims in subsequent private enforcement actions.¹¹² Through an increased and more efficient use of the private enforcement mechanism, third party participation contributes to deterrent effects that will make potential infringers more likely to comply with EU competition law. Their involvement also has the crucial function to keep oversight on the decision-maker, and to mitigate the risks of regulatory capture. While third parties cannot invoke guarantees identical to those granted to designated gatekeepers and, in particular, their rights of defence,¹¹³ the scope of the Commission’s regulatory actions, that may have an impact on third parties’ legal sphere, should be delineated by administrative law to control the exercise of public power vis-à-vis private persons.¹¹⁴

Finally, third parties’ participation in administrative procedures is an important aspect of transparency and accountability that enhances the legitimacy of the proceedings and the final decision-making.¹¹⁵ These important procedural safeguards are absent from the DMA and its Implementing Regulation. This means that those who are adversely affected by the outcome of the Commission’s decision-making, such as business users, end-users, and consumer organizations, do not enjoy a reasonable degree of participation in the decision-making. Given that these decisions ultimately have an impact on their economic interests, third parties must be entitled to such a degree of participation.¹¹⁶

However, such a participatory model is administratively burdensome, and, hence, restriction of third parties’ participation rights and no obligation imposed on the Commission to address them by a formal decision, keeps enforcement swift and efficient.¹¹⁷ Procedural efficiency is essential for addressing complex problems and for managing high pace technological changes in today’s markets,¹¹⁸ but is only one of the relevant considerations for modern public administration and a proper balance between procedural efficiency and transparency must be established. This could happen, for example, through differentiating between types of participation and by granting special status to certain relevant categories of third parties, who are sufficiently representative organizations acting in the public interest.¹¹⁹

Such a differentiation and selection of relevant complaints could be exercised by a Hearing Officer, a position that exists in competition law proceedings since 1982.¹²⁰ The Hearing Officer is not part of DG Competition, as they must act independently. In order to ensure independence from DG Competition, the Hearing Officer is attached, for administrative purposes, to the Competition Commissioner.¹²¹ The Hearing Officer safeguards ‘the effective exercise of procedural rights throughout competition [antitrust and merger] proceedings before the Commission’.¹²² Procedural rights are meant to include all rights set out in the applicable regulations, all rights recognized by the Charter of Fundamental Rights of the EU (all rights guaranteed by the European Convention on Human Rights), as well as all rights recognized in the case-law of the Court of Justice. This means that the Hearing Officer’s Terms of Reference include also the rights of complainants and third persons.¹²³ More specifically, Article 7(2) and (3) of the Terms of Reference empowers the Hearing Officer to decide on various issues related to the procedural rights of third parties.¹²⁴ In a similar way, a DMA Hearing Officer could decide whether applications by third parties should be awarded a formal status obliging the Commission to reason its decision in case it rejects their submission.

6. WHERE COULD THIRD PARTIES TURN TO?

Private enforcement by third parties

Despite their limited role, third parties’ participation in the public enforcement of the DMA is explicitly mentioned. This is not the case with regard to private enforcement. As it currently stands, the text of the DMA provides third parties limited possibility to pursue effective private enforcement actions. Remarkably, the Union legislator has not deemed it necessary to incorporate any provision to facilitate private enforcement of the DMA. However, there are implicit hints in the DMA that private enforcement of the DMA was envisaged by the Union legislator after all. Article 39 DMA provides such a hint, as it entails mechanisms of cooperation between the Commission and national courts, and stipulates that national courts are not to issue decisions that would run counter to decisions adopted by the Commission under the DMA.¹²⁵ This is a clear indication that national courts have a role to play in the enforcement of the DMA, even where the Commission has already pursued public enforcement actions and has issued an administrative decision directed at a gatekeeper. Another subtle hint is provided in Article 42 DMA, which renders Directive on representative actions by consumers¹²⁶ applicable to actions brought against infringements by gatekeepers of provisions of the DMA that harm or may harm the collective interests of consumers.¹²⁷ Similarly, this provision implies that private enforcement actions, possibly even in the form of collective actions, are envisaged by the Union legislator.

But merely enabling private enforcement actions does not mean that third parties will be able to pursue such enforcement actions effectively. In the realm of competition law, the Union legislator accompanied Articles 101 and 102 TFEU with an extensive body of supporting legislation to ensure that private actors have any chance of success when they initiate private enforcement vis-à-vis the large and powerful corporations who have engaged in anti-competitive behaviour. Of particular importance in this respect was the introduction of Directive 2014/104 (the Damages Directive).¹²⁸ However, the Damages Directive—and the national measures intended to implement the Directive—will not be applicable to private enforcement actions initiated on the basis of the DMA, because the scope of the Damages Directive is limited to infringements of Articles 101 and 102 TFEU. This is due to the fact that the DMA is not to be regarded as a competition law instrument, notwithstanding its close resemblance to the field of law. As has been elaborated above, the DMA has been adopted on the basis of Article 114 DMA and should be regarded as sector-specific internal market regulation. While the Union legislator should have anticipated the need for similar tools for third parties in pursuit of private enforcement actions based on the DMA, the DMA currently does not entail provisions, nor is it accompanied by further legislation, with regard to private enforcement of its novel regulatory framework. Consequently, third parties in pursuit of private enforcement actions based on the DMA will not have the benefit of being able to rely on several of the important provisions in the Damages Directive. In particular those provisions which pertain to the disclosure of evidence and quantification of harm would have been welcome to third parties in order to alleviate their burden of proof.¹²⁹ However, as private enforcement of the DMA currently stands, third parties can only hope that the national laws of their Member State in which they file damages claims provide for similar rules on the disclosure of evidence and the quantification of harm.¹³⁰ Without similar supporting provisions, it will be extremely hard for third parties to substantiate an infringement, quantifiable harm, and a causal link between the infringement and the harm allegedly suffered.

Access and participation in Article 102 TFEU proceedings before NCAs

Even though the Commission theoretically retains the power to pursue enforcement actions on the basis of Article 102 TFEU, and third parties could submit formal complaints under the procedure applicable to Article 102 TFEU, there seems to be little incentive for the Commission to pursue enforcement actions on the basis of Article 102 TFEU after the introduction of the DMA. Many commentators expect that enforcement actions on the basis of the DMA will largely supplant the Commission’s enforcement actions pursuant to Article 102 TFEU, in cases where the dominant digital undertakings under scrutiny simultaneously have been designated as gatekeepers under the DMA.¹³¹ The main rationale behind the adoption of the DMA was that enforcement actions on the basis of Article 102 TFEU did not yield the desired results.¹³² Under Article 102 TFEU cases, the Commission is traditionally required to define the relevant geographic and product market, and must furthermore to establish dominance and abuse thereof by the undertaking in question, whereas under the DMA such requirements simply do not exist. Due to the DMA’s ex-ante nature, the Commission will be able to pursue enforcement actions more swiftly and effectively than previously under Article 102 TFEU, and the enforcement framework of Regulation 1/2003. While it is unlikely that the Commission will choose to initiate Article 102 TFEU proceedings when a more efficient enforcement route is readily available,¹³³ NCAs vested with the power to apply Article 102 TFEU to harmful conduct by dominant digital undertakings may do so. Hence, while the powers of NCAs are particularly limited when it comes to the enforcement of the DMA, they still remain empowered to apply Article 102 TFEU to anti-competitive conduct by dominant digital undertakings as they see fit. The DMA does not preclude NCAs from bringing such enforcement actions. Quite to the contrary, Article 1 (6) DMA explicitly permits such actions, as it states that enforcement of the DMA is without prejudice to the application of Articles 101 and 102 TFEU.

In light of the foregoing, third parties could still turn to their NCAs pressuring them to open Article 102 TFEU proceedings vis-á-vis such dominant digital undertakings and trying to access and participate in such procedures. In a 2021 paper, many NCAs in fact argued that ‘national agencies have proven to be a valuable radar-screen for cases’. Especially, for smaller market players in national markets, access to NCAs is easier as these players may otherwise be reluctant to file a complaint against a gatekeeper with the Commission. Moreover, NCAs could filter cases brought to the Commission, as all agencies' resources are limited. This way, the NCAs argued, the ‘radar-screen’ is much wider and the quality of signals reaching the Commission will be higher.¹³⁴

Most national administrative laws define a ‘legally relevant interest’ that validates access of third parties to the procedure.¹³⁵ German competition law, for example, foresees the participation of final consumers where their ‘interests will be substantially affected’,¹³⁶ while collective consumer organizations must show that ‘a wide range of consumers”¹³⁷ are impacted by a specific decision.¹³⁸ Similar approaches to third party participation in competition law enforcement can be found in most other jurisdictions, for example, France,¹³⁹ Greece,¹⁴⁰ Italy,¹⁴¹ and the Netherlands,¹⁴² where any person who submits a written, reasoned complaint can obtain formal complainant status if their interests are likely to be materially affected by the conduct that is the subject matter. However, even in case access is provided, this does not necessarily mean that the conditions upon which access is granted enable third parties to protect their economic interests. Participation by third parties, once admitted to the procedure, is conditioned by the specific way administrative enforcement procedures are structured in national legal systems. While Directive 2019/1 (the ECN+ Directive) is expected to further harmonise national procedural rules—and in particular the NCAs’ ability to reject low-priority complaints—the Directive is mostly aimed at compelling NCAs to rationalise resource allocation and optimally deal with financial and human resource constraints. It nudges NCAs towards swift and efficient decision-making, and does not focus so much on the transparency and fairness of the national competition law procedures. Accordingly, the Directive does not include harmonisation measures for the criteria of handling of complaints, leaving these to be settled by national laws. National administrative procedures of the Member States provide third parties with different degrees of access and participation rights before the NCAs. Even though the Commission tried on numerous occasions to harmonize procedural divergences across the Member States,¹⁴³ there is currently no convergence with regard to the rules governing third parties’ access and participation in competition law proceedings that are applied when NCAs enforce Article 102 TFEU. While the ECN+ Directive has introduced a minimum level of harmonization in 2019 by requiring all Member States to grant their NCAs the powers to set priorities and reject complaints on priority grounds,¹⁴⁴ it has not specified the conditions for such decisions and the criteria for Member States' national administrative law concerning NCAs' power to handle and reject complaints.¹⁴⁵ Important differences remain as to the grounds and the scope of discretion left for an NCA to reject a complaint. Until recently, Spain and France had no discretion to reject complaints and provided broad access and participation rights for third parties,¹⁴⁶ while procedures in Austria, Poland, and Slovenia do not recognize a formal status for complainants at all.¹⁴⁷

Many Member States control the access of third parties and rejection of complaints by requiring their NCAs to take a formal decision, which is subject to judicial review. Some are obliged to reason and to publish their decisions to the public.¹⁴⁸ There are, however, also Member States who do not require the adoption of a formal decision for rejecting complaints, and some of them also do not require them to reason and publish such decision.¹⁴⁹ This last category is important as in these countries, third parties are not able to appeal such an informal decision to the courts.

However, even in cases where access is provided, this does not necessarily mean that the conditions upon which access is granted enable third parties to protect their economic interests.¹⁵⁰ There are three different ways in which NCAs grant such procedural entitlements: those who do not grant formal status to third parties and complainants; those who provide rights only to those meeting the formal complainant criteria; and those who provide equal rights to all third parties.¹⁵¹ In some other jurisdictions, such as Austria, Poland, Denmark, Malta, Ireland, and Slovenia, procedural rights for third parties are omitted altogether. This indicates vast differences between the jurisdictions in the legal protection afforded to individuals.

More importantly for our discussion, while third parties may access the procedures and enjoy procedural safeguards by their NCAs in certain Member States, they will not get access and will not have any participatory rights in either of these procedures in other Member States. The latter category is left without access to justice and without effective judicial protection in cases where gatekeepers’ conduct may affect their economic interests but where they cannot compel NCAs or the Commission to act upon their signal.¹⁵²

The interdependency of the DMA and the procedural rights granted to complainants and interested third parties in national administrative proceedings before the NCAs remains a crucial aspect of effective judicial protection of third parties’ rights as laid down in Article 47 of the Charter of Fundamental Rights of the EU.

In light of the above, it has to be highlighted that third parties could currently best resort to their NCAs who could initiate Article 102 TFEU proceedings. Not only will they be able to profit from national administrative provisions which allow them to participate in the public enforcement proceedings initiated by the NCAs vis-à-vis dominant digital undertakings, but third parties will also be able to use the binding force of NCAs’ decisions in follow-on private enforcement litigation. As their claim will be based on an infringement of competition law, as opposed to an infringement of the DMA, the Damages Directive will be applicable in those proceedings. Concretely, this will mean that important rules on the disclosure of evidence and quantification of harm as implemented in the laws of the Member State will be available to third parties and that their chances of success in demonstrating quantifiable harm and a causal link will be increased exponentially. Nevertheless, in all these cases, different categories of third parties will have very different financial and other incentives to start proceedings before national courts.

European Ombudsman as guarantor of the general ‘right to good administration’

Besides the above discussed possibilities, third parties, whose actions (submitting information, consultation) are determined and dependent on the Commission’s discretion, may turn to the European Ombudsman (EO). Over the past 30 years of its existence, the EO has handled numerous competition and state aid law cases often centring around the boundaries of the Commission administrative discretion in those proceedings.¹⁵³ For example, in the famous Intel case,¹⁵⁴ without questioning the Commission’s discretion with regard to taking note of a meeting during its investigation, the EO found that in order to comply with principles of good administration, this discretion cannot be used in an arbitrary manner.

The EO was established by the Maastricht Treaty in 1992 in order to combat maladministration by the executive branch of the EU. By improving the accountability of the Union institutions towards EU citizens, the EO’s function was to guarantee good administration and to reduce the distance between EU citizens and the complex administrative procedures for the implementation of EU law.¹⁵⁵ According to Article 228(1) TFEU, the EO is empowered to receive, examine, and report on complaints concerning instances of maladministration in the activities of the Union institutions, bodies, offices or agencies, with the exception of the Court of Justice of the EU acting in its judicial role.¹⁵⁶

The EO investigates instances of maladministration, makes recommendations to put an end to these instances, and monitors their compliance. As the concept of maladministration is mentioned, but is not defined in the Treaty provisions, the EO considers two main criteria to determine if an act qualifies as maladministration. First, whether the institution or body is compliant with the rule of law, hence whether a certain act respects all procedural and substantive rights of individuals including, without limitation, the individual’s fundamental rights.¹⁵⁷

Second, and important for our discussion, the EO decides whether maladministration stems from a consideration on the very purpose of public administration, namely the fulfillment of administrative duties for the benefit of citizens and to enable citizens to exercise their rights.¹⁵⁸ Failure to respect the law is a form of maladministration. However, the concept of maladministration is broader than the concept of illegality. Principles of good administration may be infringed, even if there is no breach of legal obligations.¹⁵⁹ In other words, conduct may not qualify as illegality; nevertheless, it still may qualify as maladministration. In this sense, the EO’s role is more nuanced than that of the courts who can only sanction actions taken outside the law.¹⁶⁰ Therefore, maladministration goes beyond what is sanctionable through judicial review.¹⁶¹

The EO functions as the guarantor of the general ‘right to good administration’ as laid down in Article 41 of the Charter of Fundamental rights¹⁶² and as explained in the ‘European Code of Good Administrative Behaviour’¹⁶³ and includes, among others, the right to be heard and to make statements, and the duty to state the grounds of decisions.¹⁶⁴

The right to make a complaint to the EO rests with any citizen of the Union or any natural or legal person residing or having its registered office in a Member State.¹⁶⁵ Complaints can be submitted within 2 years of the alleged act of maladministration and, in competition law cases, they have often been lodged parallel with ongoing administrative proceedings.¹⁶⁶ In case the EO finds an instance of maladministration, it may take a number of possible steps, but these do not have the same objective and legal force as judicial proceedings. Hence, the ultimate decision of the EO is not legally binding on the institutions concerned.¹⁶⁷

First of all, the EO is obliged to cooperate with the institution concerned and must seek to find a ‘friendly solution’ to eliminate the maladministration. If the complaint is resolved through such a measure, the case is closed with a reasoned opinion. If it is not, or the maladministration persists, the EO may either close the case with a reasoned decision by attaching a ‘critical remark’ or issue a report with ‘draft recommendations’.¹⁶⁸ Within 3 months of receiving that decision or report with recommendations, the institution or body must submit its detailed opinion in response to the EO’s measures. Should there be no response, or the EO considers the response unsatisfactory, the EO may, but is not obligated to, draw up a special report to the Parliament, which may include recommendations; any such report must also be sent to the institution concerned and to the complainant.¹⁶⁹ Whereas the responsibility and competence of the EO are merely recommendatory, and his or her decisions do not bind any other EU actors, levels of complaints have remained constant over the years.¹⁷⁰

There is a crucial difference between the EO’s investigation (followed by a finding of maladministration) and judicial review by EU courts: the EO has the power to, and regularly does, investigate the relevant institution’s or body’s follow-up compliance with her or his recommendations.¹⁷¹ In fact, an important element of the EO’s complaint handling mandate is to see the solution of the problem through to its end and to track compliance on a case-by- case basis and keep statistical records thereof.¹⁷²

This overview shows that third parties, who currently do not have the means under the DMA to question the way the Commission has taken account of their interests in its decision-making, as they have no right to a reasoned decision which reacts to the information they submit, can rely on the EO’s mandate, institutional position, and means of action that stress the distinct complementary role it has in ensuring the legality of discretionary decisions.

Most importantly, the EO can, without interfering with the Commission’s wide discretion concerning complex technical assessments under the DMA, address questions concerning the pursuance of public interests underpinning the DMA.¹⁷³ Consequently, through the EO, third parties can question and control whether the Commission takes all relevant considerations into account in view of the public interests that should be pursued under the DMA. As previous cases show, the EO has been able to distinguish ways in which competing public interests are effectively considered in the discretionary decision-making. For example, by explicitly addressing the link between the processes of information gathering that also underlie the Commission’s policy choices under the DMA, on the one hand, and the public interests that ought to be pursued, on the other.¹⁷⁴

Hence, by safeguarding the Commission’ s discretion on how to ensure plurality in the information-gathering structures that form the basis of its decisions, the EO could address possible biases in the Commission’s decision-making.

In other legal fields, the EO has been able, without questioning the discretion of the Commission to organize the decision-making structures, and without questioning how it chooses from various ‘input sources’ in the process of collecting information, to recall the public interests that needed to be pursued in this field.¹⁷⁵ It did so, by simply asking the Commission to explain in a detailed manner how it ensures the proper consideration of the public interests that, according to the respective EU law, ought to be balanced in the Commission’s decisions. When the Commission engages in complex technical assessment of the circumstances under the DMA, it concretizes and interprets the public interests envisaged by the DMA that ought to guide its substantive choices as the administrative decision-maker.¹⁷⁶

On this basis, third parties could ask the EO to probe the Commission to specifically indicate whether there are any mechanisms that ensure the objectivity of the opinions on which the Commission relies to make policy choices under the DMA and whether third parties’ submissions of information and consultation are ‘intended to, and actually [do] ensure that sufficient attention is given to the issues of public interest raised by the complainant’.¹⁷⁷

7. CONCLUSIONS

With the adoption of the DMA, the European Commission has entered a new phase of its battle against digital corporate giants and the associated threats emerging from the unaccountable power of transnational private companies. The DMA is one of the most important building blocks of a new digital constitution of the EU that addresses new forms of threats and interference by private undertakings with in digital markets and provides mechanisms to control corporate power. However, viewed exactly from the perspective of a modern constitutional administration, the DMA and its central enforcer, the European Commission, must also safeguard fundamental rights of individuals, small businesses, civil and consumer organizations, both concerning substantive and procedural rules.

There is no doubt that as a modern administration, the EU administrative decision-making needs to be equipped with discretionary decision-making powers in order to address and efficiently solve complex socio-economic and technical problems. Policy areas that are subject to rapid changes and are replete with uncertainty, such as the regulation of digital markets, require dynamic, responsive and effective regulation, (which the DMA seeks to ensure), coupled with wide margin of discretion on the side of the administrative decision-maker in order to enable swift action. Expert decision-making is indispensable to sort out complexities in modern societies, and previous efforts by the Commission in enforcing the EU competition rules in digital markets showed that speedy solutions are equally relevant.

However, the DMA is not just an innovative set of substantive rules that aims to control the corporate power of gatekeepers, but it is also an instrument that centralizes enforcement powers in the hands of the Commission in an unprecedented way. By concentrating enforcement in such a centralized manner, the EU legislator has fittingly granted considerable discretion to the Commission to use technical expertise competently in resolving individual cases.¹⁷⁸

At the same time, as we demonstrate in this article, such a centralized enforcement concentrates considerable power over decision-making in the hands of the Commission. In this article, we show that the way the DMA’s enforcement has been designed provides its sole enforcer, the Commission with the necessary regulatory competence, technical expertise, flexibility, discretion, and responsiveness in enforcement, but falls short of delineating the scope of the Commission’s regulatory actions, that may have an impact on third parties’ legal sphere.

Even though third parties do not need to defend their personal legal sphere during enforcement of the DMA, they have an interest in the outcome of the Commission’s decision-making: the ensuing decisions might affect their economic interests, even if not always in a direct way. In the DMA’s current enforcement and supervision framework, the role of third parties is limited to merely providing information and comments, and does not extend to broader participatory rights, such as the right to submit complaints, the right to a reasoned decision, or the right to access to documents.

This is striking, as the current enforcement framework of the DMA creates a situation reminiscent of the EU’s transparency debate at the end of the 1990s that endeavoured to remedy the EU’s democratic deficit and, aimed to ‘reduce the opacity of its decision-making processes’.¹⁷⁹ That debate resulted in a ‘procedural constitutionalization’ laying down fundamental procedural safeguards, such as a general right of access to information as a fundamental procedural right of the citizen in the EU legal order. This strengthened the ‘public accountability’ rationale of procedural rights in EU competition law proceedings.¹⁸⁰ Despite various proposals during the legislative process, such procedural safeguards have not made their way to the final text of the DMA and its Implementing Regulation.

Formal participation mechanisms for third parties have the function to control the exercise of public power vis-à-vis third parties, whose interests the Commission, as the administrative decision-maker of the DMA, is bound to uphold.

In order to remedy these shortcomings, we explore various alternative ways that could better facilitate third parties’ participation and provide effective judicial protection. Within the current framework of the DMA, we propose two solutions. First, the publication of guidelines by the Commission indicating what kind of third-party submissions it welcomes and, according to what type of criteria it assesses the submissions. This still leaves the Commission a wide margin of discretion in its decision-making, but to some extent concretizes third parties’ submissions and participation. Second, the Commission could consider differentiating between types of participation and granting special status to certain relevant categories of third parties, who are sufficiently representative organizations acting in the public interest. Such a differentiation and selection of relevant complaints could be exercised by introducing the position of a DMA Hearing Officer, similarly to the position that exists in competition law proceedings under Articles 101 and 102 TFEU and merger control.

Further, in the current framework of the DMA, we analysed both the public and private enforcement of Article 102 TFEU in the national legal systems as an alternative but found that both avenues have significant shortcomings that may result in a situation in which third parties are not fully and properly facilitated, and we find that the possibility to file complaints with the EO is the most promising remedy at this point. The EO would be able to act without interfering with the Commission’ s discretion on how to ensure plurality in the information-gathering structures that underlie its decision-making, but also address possible biases that may undermine the protection of the public interests that underlie the DMA. The success of the DMA will depend on many and complex issues that require expert knowledge and discretionary decision-making by the Commission. At the same time, the ultimate success of the Commission fulfilling this role requires not only comprehensive solutions but also wide acceptance and legitimacy, in line with principles of democracy and accountability.

Footnotes

SUPPLEMENTARY DATA

Supplementary data are available at Journal of Antitrust Enforcement online.