Digital ecosystems to be included in Big Tech antitrust, merger probes, EU regulators say

EU Commissioner for Competition Margrethe Vestager holds a news conference at the European Commission in Brussels

By Foo Yun Chee

BRUSSELS (Reuters) - EU antitrust regulators investigating Big Tech's merger deals or their market power will now also take their digital ecosystems and the impact of their free products or services into account, EU competition chief Margrethe Vestager said on Thursday.

Vestager made the comment as she announced an update to nearly three-decade old rules known as the Market Definition Notice that determine whether companies have the market power to throttle rivals or control prices.

The update follows criticism from lawyers and academics that the European Union's antitrust and merger laws have failed to keep up with the times, especially in tech markets and with companies offering free products or services in exchange for users' data.

How regulators define markets can help them measure a company's pricing power in a merger or its power to shut out rivals in an antitrust case and the concessions they extract from these companies.

For cases involving Big Tech, the European Commission will now examine multisided platforms and digital ecosystems, which are products built around a mobile operating system, to define a company's market power, as well as products and services offered for free.

A company's market share could also be defined based on sales, capacity or the number of active users or website visits under the updated rules.

Innovation, especially the development of new products, and other non-price elements such as reliable supply and the quality of products and services will now be given greater emphasis, a move which could affect the pharmaceutical industry.

Another new element is the inclusion of imports and their impact on EU businesses in the EU antitrust watchdog's assessment.

"To maintain our markets' competitiveness, we need to get the framework right because in the end competitive markets, they will serve consumers best," Vestager told a news conference.

(Reporting by Foo Yun Chee; Editing by Hugh Lawson)