Online platforms, which comprise a wide range of software-based technologies, from search engines and social networks to price comparison websites and collaborative economy platforms, are drivers of growth, innovation and competition. They enable businesses and consumers to make the most of the opportunities created by the digital economy. Supported by the emergence of mobile devices and pervasive wireless connectivity, online platforms have transformed how we live, interact and transact. In doing so they have disrupted existing sectors of the economy and challenged regulatory frameworks. As part of its Digital Single Market Strategy the EU Commission announced its plans to launch a consultation to investigate how the largest online platforms use their market power and whether the current regulatory environment remains ‘fit for purpose’. This report responds to that consultation.
Our assessment of the features of these markets suggests that online platforms that succeed in harnessing strong network effects can become the main provider in a sector, gateways through which markets and information are accessed, and an unavoidable trading partner for dependent businesses. Such platforms are likely to possess substantial market power. However, the possibility of disruptive innovation is higher in these markets than in other networked industries and this may create competitive pressures even where firms have high market shares. We conclude that determining whether a firm possesses substantial market power, or is abusing that power, requires meticulous case-by-case analysis. On this basis we advise against the creation of a platform-specific regulatory regime. Instead, to protect consumers and to ensure that market power is not abused, we recommend that existing regulators should be vigilant in these markets. We also considered three areas of existing regulation and suggested a number of adaptations to each.
Despite the challenges competition authorities face when dealing with online platforms, we find that the flexibility of competition law means that it should be well-suited to addressing the subtle and complex abuses of dominance that may arise. We suggest that the merger control regime should be modified, to prevent the acquisition of smaller digital tech firms by large online platforms from escaping scrutiny. The slowness of competition enforcement, as exemplified by the ponderous Google case, is cause for concern in such fast-moving markets: we recommend that the Commission make greater use of ‘interim measures’ and impose time limits on commitment negotiations, to make enforcement more responsive. There are also sector-specific issues. For example, some allege that online travel agents exploit their bargaining power relative to their trading partners by engaging in a variety of aggressive and misleading practices. To address these concerns, we urge the Competition and Markets Authority to investigate the sector. In markets where online platforms have been found to impose unfair terms and conditions on their trading partners, we suggest that competition authorities could usefully develop codes of practice.
The collection and use of consumer data are integral to the provision of online platforms’ services. We are therefore concerned to find that consumer trust in how online platforms manage personal data is worryingly low. Consumers seem to be unaware that they trade their personal data in exchange for access to many of the so-called ‘free services’ that online platforms provide and that their data are used to generate advertising revenues or are sometimes sold on and shared with third parties. The opaque and legalistic privacy notices used by online platforms are one reason for this lack of trust. We also identify a lack of competition between platforms on privacy standards, and suggest that online platforms could potentially abuse a dominant position by downgrading their privacy standards. To address this, we recommend that the Government work with the Commission to develop a privacy seal that incorporates a graded scale, and that platforms found to have repeatedly or egregiously breached data protection laws should be required to communicate this directly to their users. We also urge Government to press for the proper implementation of the recently agreed General Data Protection Regulation, and invite the Commission to clarify some of its more ambiguous provisions.
While some online platforms have gone beyond the requirements of existing consumer protection law, bad practices also persist. There is a widespread lack of transparency in how platforms rank and present information to their users. We recommend that existing regulation be altered to require online platforms clearly to communicate the basis on which they rank results, and also to inform consumers when ‘personalised pricing’ is taking place.
Underlying the Digital Single Market Strategy is Europe’s conspicuous failure to produce any truly global online platforms. Yet Europe is getting better at producing $1bn-valued tech firms (‘unicorns’), and within Europe the UK leads the field, having produced half of the unicorns in Europe. The UK thus stands to gain more from the creation of a Digital Single Market than any other EU Member State. We suggest that the fundamental aim of the Strategy—to create a scale market of 500 million consumers—is the right one: if it is achieved Europe has the potential to play a leading role in the next phase of the digital revolution. We urge a sharp focus on this fundamental aim.
We support the ambitions of the Digital Single Market Strategy, but we note that the sensitive concerns raised by online platforms have created pressure on regulators and legislators to act at Member State level. This has increased regulatory fragmentation and threatens to undermine the possibility of making the Digital Single Market a reality.
We believe that it is necessary to put in place an ongoing process that can act as an outlet for the concerns of regulators and legislators, as well as businesses, consumers and indeed citizens. To this end, we recommend the appointment of an independent expert panel that would seek to gather concerns, subject them to rigorous analysis, and make policy recommendations to enable the sustained growth of Europe’s digital economy. The nature and role of this panel are outlined in the concluding section of our report.The report's Summary of Conclusions and Recommendations states
Chapter 2: The importance of online platforms
1. Online platforms are drivers of growth, innovation and competition, which enable businesses and consumers to make the most of the opportunities provided by the digital economy.
2. E-commerce platforms allow SMEs to access global markets without having to invest in costly digital infrastructure, and provide consumers with increased choice. Search engines enable their users to navigate the web efficiently, and enable businesses to engage in more targeted advertising. Social media and communication platforms provide citizens with new opportunities for interaction, self-expression and activism.
3. Policymakers should take care when examining the challenges these rapidly developing markets present not to lose sight of the very considerable benefits that online platforms provide.
4. The Commission’s decision to conduct a comprehensive assessment of online platforms should not be seen as inherently protectionist. Given the impact these businesses have had on people’s lives and the economy, and concerns about whether existing regulatory regimes are still fit for purpose, a thorough analysis of online platforms is timely. If the growth of Europe’s digital economy is to be maximised, it is important that such concerns are investigated and, where appropriate, addressed.
Chapter 3: Defining ‘online platforms’
5. The Commission’s primarily economic definition of multi-sided online platforms offers insight into central aspects of these businesses including their intermediary role, the interdependencies that arise between their distinct user groups, and the role that data plays in intermediating between these groups. This provides a helpful way of thinking about online platforms that can usefully inform the work of policymakers and regulators.
6. The boundaries of the definition are, however, unclear. This is illustrated by the Commission’s own list, which excludes traditional platform businesses that now operate online, yet includes some digital platforms that are not multi-sided. Broadly interpreted, the proposed definition could encompass ‘all of the Internet’; strictly applied, it would only capture specific elements of the businesses with which it is concerned.
7. We recommend that further consideration of the need for regulation of online platforms should start by attempting to more precisely define the most pressing harms to businesses and consumers, and then consider the extent to which these concerns are common to all online platforms, sector- specific, or specific to individual firms.
Chapter 4: Market power and online platforms
8. The markets in which online platforms operate are characterised by accelerated network effects. These may fuel exponential growth, increase switching costs, increase entry barriers for potential competitors and lead to monopolistic outcomes. Firms that succeed in harnessing these network effects may become the main platform in a sector, gateways through which markets and information are accessed. This can reduce choice for users and mean that they become an almost unavoidable trading partner for businesses. Such platforms are likely to possess a significant degree of market power.
9. However, in contrast to some networked industries, the market power of the most successful online platforms is secured through innovation that has succeeded in harnessing network effects. The risk of disruptive innovation is also greater in these markets because the up- front investment in infrastructure required for market entry is often lower. Therefore, ‘competition for the market’ may create competitive pressure even when one firm has a high market share.
10. Furthermore, we note that competitive pressures vary in type and intensity from sector to sector, and many online platforms are unlikely to possess significant market power. Case by case analysis is therefore necessary.
11. On this basis, while competition authorities reserve the power to break up firms and limit their market shares, we do not believe that ex ante regulation of platforms that sought to substantially restrict their activities on the basis of their market share alone, is necessary. Nonetheless, the potential for dominant positions to emerge means that competition authorities must be vigilant in these markets, to ensure that market power is not abused. Protecting users in these markets also requires that consumer rights and data protection rights are effectively enforced.
Chapter 5: Competition law and online platforms
Restrictions on pricing
12. The increasing use of restrictive pricing practices by online platforms requires critical scrutiny by competition agencies. While some restraints may be justified to enable price comparison websites to operate, these clauses may also, especially when broadly designed, enable firms to exploit suppliers and exclude competitors. A case by case analysis by competition authorities is therefore necessary.
13. While we commend the commitments secured by National Competition Authorities from Booking.com and Expedia to drop the use of wide price parity clauses, we note that the asymmetries of bargaining power that characterise the online travel agent sector may mean that the effects of wide parity clauses persist in practice, even after the prohibition of these clauses.
14. We recommend that the Competition and Markets Authority urgently order a market investigation into the online travel agent sector. This investigation should consider the extent to which banning wide parity clauses has been effective, claims that online travel agents continue to prevent suppliers from offering other online travel agents a lower price, and other misleading practices alleged against online travel agents, including the creation of ‘shell websites’. As this is a Europe-wide issue, we recommend that the Commission support this investigation and co-ordinate any related activity by other National Competition Authorities.
15. We believe the findings of this investigation may be of wider application and could provide helpful insights about how to address similar practices in other sectors. While the evidence we received applied to travel accommodation, the findings of this investigation may be useful in considering the relationship between Online Travel Agents and other supplier businesses, which also affects fares and travel costs for consumers.
16. We note the growing regulatory fragmentation in the online travel agent sector that has arisen as a result of unilateral action by Member States. This undermines ambitions to create a Digital Single Market. We urge DG Competition to publish guidance in due course clarifying the use of wide and narrow parity clauses by online travel agents.
Asymmetries in bargaining power in other industries
17. We support the Government’s view that developing codes of practice, most likely on a sectoral basis, could help to discourage unfair trading practices in these markets. Such codes of practice should be based on rigorous analysis. We therefore recommend that the Competition and Markets Authority use its market investigation tool to examine markets where concerns about unfair trading practices are most widespread, with a view to determining whether codes of practice are needed.
18. We note with concern that DG Competition’s ‘sector inquiry’ power does not enable it to impose legally binding sector-wide remedies. This limits the ability of the EU competition regime to address market-wide problems efficiently. We recommend that DG Competition be granted powers to impose legally binding sector-wide remedies as a result of a sector inquiry, subject to conditions to be agreed with National Competition Authorities.
19. Extending the EU’s online dispute resolution platform to cover business- to-business disputes could help to address concerns about unfair trading practices by online platforms. Such a mechanism could complement codes of practice described above. However, we note that the business-to-consumer online dispute resolution tool appears not to have been well-implemented. We recommend that the Commission’s first priority should be to ensure the effective implementation of the online dispute resolution mechanism in its current form.
20. Fear of commercial retaliation by the online platforms on which they depend may prevent complainants from approaching competition authorities. We recommend that the Competition and Markets Authority introduce new measures to protect complainants in these markets. These should include imposing substantial penalties upon online platforms that are found to have engaged in commercial retaliation.
Vertical integration and leveraging
21. Google’s search engine shows how the tendencies to concentration in these markets may result in a successful innovator becoming the main provider of a particular service. Google Search has become a gateway through which a large proportion of the world accesses information on the Internet, which many businesses consequently depend on in order to be visible and to compete online.
22. The Google case illustrates the way in which a platform may use a strong position in one sector (in this case, general search) to integrate a range of other services into its core offering, thereby entering into direct competition with trading partners on its platform. Such integration can offer consumers benefits, such as increased convenience; it can also exclude competitors and harm consumers, if they are not directed to the best service or if innovation is reduced.
23. The evidence we have received indicates that it is not possible to formulate useful general rules about vertical integration in relation to online platforms, because each case is substantially different. Whether individual examples should be deemed an abuse must be ascertained through rigorous case by case analysis. Competition enforcement is the most appropriate instrument to deal with such concerns where they arise.
Mergers and acquisitions
24. Large online platforms frequently acquire innovative firms, often at a significant premium, in order gain a competitive advantage over rivals; it is important that competition authorities are vigilant to ensure that, in doing so, they are not also buying up the competition.
25. We are concerned that mergers and acquisitions between large online platforms and less established digital businesses may escape scrutiny by competition authorities, because the target company generates little or no revenue and so falls below the turnover threshold adopted by the European Commission’s Merger Regulation.
26. We recommend that the Commission amend the Merger Regulation to include additional thresholds that better reflect this dynamic, examples of which might include the price paid for the target or a version of the ‘share of supply’ test used in the UK.
Data and competition law
27. Data are integral to the operation of many online platforms and the benefits they provide. For this reason, exclusive access to multiple sources of user data may confer an unmatchable advantage on individual online platforms, making it difficult for rival platforms to compete.
28. As well as providing new benefits, rapid developments in data collection and data analytics have created the potential for new welfare reducing and anti- competitive behaviours by online platforms, including subtle degradations of quality, acquiring datasets to exclude potential competitors, and new forms of collusion. While some of these abuses are hypothetical, they raise questions as to the adequacy of current approaches to competition enforcement.
29. We recommend that the European Commission co-ordinate further research regarding the effects that algorithms have on the accountability of online platforms and the implications of this for enforcement. We also recommend that the Commission co-ordinate further research to investigate the extent to which data markets can be defined and dominant positions identified in these markets.
30. It is clear that dominant online platforms could potentially abuse their market position by degrading privacy standards and increasing the volume of data collected from their users. We welcome ongoing research and competition investigations that seek to clarify the circumstances under which degradation of privacy standards could be deemed abuse under competition law. In the meantime, these concerns underline the clear need for the enforcement of data protection law to be sufficiently robust to deter bad behaviour.
The adequacy of competition law
31. The sheer diversity of online platforms and the complexity of their business models raise obvious challenges for competition authorities. The lack of price signals on the consumer side, and the presence of multiple prices in multi- sided markets, create difficulties for standard antitrust analysis. Quality is a key parameter of competition in these markets, but is not easily measured.
32. While these challenges are significant, we note that the flexible, principle- based framework of competition law, which can be customised to individual cases, is uniquely well-suited to dealing with the subtlety, complexity and variety of possible abuses that may arise in these markets. We cannot see how a less flexible regulatory approach could be more effective.
33. Competition law is perceived as being too slow to react to rapidly evolving digital markets. While the length of time taken to arrive at a decision in the Google case reflects its importance, it also highlights a wider problem. In such fast-moving markets a competitor who falls foul of anti-competitive conduct may suffer irreversible harm long before a competition case concludes. This undermines public confidence in the ability of regulators to hold large online platforms to account and may create political pressure for legislators to regulate unnecessarily.
34. In order to speed up the enforcement of competition law, and in light of recent changes in UK legislation, we recommend that the Competition and Markets Authority make greater use of interim measures. DG Competition should also make greater use of interim measures by lowering the threshold for their use, bringing it into line with that of the UK Competition and Markets’ Authority. (Paragraph 200)
35. We recommend that the Competition and Markets Authority and DG Competition consider introducing time limits for the process of negotiating commitments between competition authorities and dominant firms. Restricting the period for discussion of commitments should encourage parties to offer serious proposals at the outset and prevent them from delaying the process.
36. We also note that our proposal to provide DG Competition with market investigation powers would enable the Commission to identify and address market-wide problems more efficiently and comprehensively than its current sector inquiry tool.
Chapter 6: Data protection law and online platforms
Consumer concerns about personal data and online businesses
37. Consumers agree to share their personal data with online platforms in exchange for access to their services. However, the complex ways in which online platforms collect and use personal data mean that the full extent of this agreement is not sufficiently understood by consumers. As a result, trust in how online platforms collect and use consumers’ data is worryingly low and there is little incentive for online platforms to compete on privacy standards. We believe this presents a barrier to future growth of the digital economy. Online platforms must be more effective in explaining the terms of such agreements to consumers.
General Data Protection Regulation
39. Nonetheless, given the limitations of the consent-based model, and industry’s reluctance to make the mechanisms of consent more meaningful, we are concerned that the provisions that widen the definition of ‘personal data’ will be difficult to apply in practice. We recommend that the Commission investigate how the requirement for all businesses to seek consent for the collection of personal data through online identifiers, device identifiers, cookie IDs and IP addresses can be applied to online platforms in a practical and risk-based way.
40. The privacy notices used by online platforms are inaccessible to the average consumer. They are too long and expressed in complex language. While the General Data Protection Regulation will require more transparency in privacy notices, and introduce heftier fines for non-compliance, this alone may not be sufficient to make consumers understand the value of their data when transacting with online platforms.
41. We support provisions within the General Data Protection Regulation to allow organisations to use privacy seals, or kite-marks, to give consumers confidence that they comply with data protection rules.
42. In order to encourage competition on privacy standards, not just compliance with the law, we recommend that the Government and the Information Commissioner’s Office work with the European Commission to develop a kite-mark or privacy seal that incorporates a graded scale or traffic light system, similar to that used in food labelling, which can be used on all websites and applications that collect and process the personal data of EU citizens.
43. To discourage misuse of users’ personal data, we recommend that the European Commission reserve powers to require online platforms that are found to have breached EU data protection standards, or to have breached competition law by degrading privacy standards, to communicate this information clearly and directly to all of their users within the EU through notifications on their web-sites and mobile applications. We suggest that this power be used sparingly, for repeat offenders or particularly egregious breaches of the law.
44. Data portability could be one of the most significant changes brought in under the General Data Protection Regulation. It could promote quality- based competition and innovation by making it easier for consumers to switch platforms. This would facilitate the emergence of new market entrants.
45. However, we are concerned that the principle of data portability may unravel in practice. If applied too rigidly, it could place onerous obligations on emerging businesses; however, unless it is more clearly defined, it is unlikely that it will be implemented by many online platforms.
46. We recommend that the Commission publish guidelines explaining how data portability requirements apply to different types of online platform. These guidelines should match data portability requirements to different types of online platform, adopting a proportionate approach depending on the essentiality of the service in question.
47. The use of personal data as the basis of research, particularly on social media, goes beyond what most users would ordinarily expect or consider acceptable. We recommend that the Government and Information Commissioner’s Office publish guidelines in the next 12 months setting out best practice for research using personal data gathered through social media platforms.
48. In the past, online platforms established outside the EU were not subject to European data protection rules. This resulted in a weak data protection regime in which European citizens’ fundamental rights were breached, and reduced consumer trust in how online platforms collect and process personal data. We are therefore concerned that industry remains sceptical about the forthcoming General Data Protection Regulation. Online platforms must accept that the Regulation will apply to them and will be enforced, and prepare to make the necessary adaptations.
49. We urge the Commission, the Government, regulators and industry to use the time before the Regulation enters into force to ensure that its terms are well understood and effectively implemented.
Chapter 7: Consumer protection and online platforms Consumer-to-consumer transactions
50. Some online platforms take consumer protection issues seriously and dedicate significant business resources to addressing problems as and when they arise.
51. Nonetheless, the growth of online platforms and the collaborative economy raise important questions about the definitions of ‘consumer’ and ‘trader’, which form the cornerstone of consumer protection law. This creates uncertainty about the liability of online platforms and their users in instances where consumer protection concerns may arise.
52. We recommend that the Commission and the Government review the use of these definitions within the consumer protection acquis in order to determine whether gaps in legislation exist and if legislative change is needed. The Commission should also publish guidance about the liability of online platforms on consumer protection issues in relation to their users, including their trading partners.
53. We also recommend that online platforms clearly inform consumers that their protection under consumer protection law may be reduced when purchasing a good or service from an individual, as opposed to a registered trader.
Transparency in how online platforms present information
54. Concerns about the lack of transparency in how search and meta-search results are presented to consumers are well founded, especially in relation to price comparison websites, where the results of a search may be based on a commercial deal between the website and a business, rather than on the best possible price. However, we do not believe that this problem should be addressed by requiring online platforms to disclose their algorithms, which are their intellectual property. Instead, we believe that these concerns should be addressed through increased transparency.
55. We recommend that the Commission amend the Unfair Consumer Practices Directive so that online platforms that rank information and provide search and specialised results are required to clearly explain on their website the basis upon which they rank search results. We also recommend that the Commission amend the Directive to require online platforms to provide a clear explanation of their business models and relationships with suppliers, which should also be prominently displayed on their websites.
56. We note concerns that online platforms can and do engage in personalised pricing, using personal data about consumers to determine an individual price for a particular good or service, without clearly communicating this to consumers. This is another worrying example of the lack of transparency with which some online platforms operate. We recommend that DG Competition build on the work of the Office of Fair Trading and investigate the prevalence and effects of personalised pricing in these markets. We also recommend that online platforms be required to inform consumers if they engage in personalised pricing.
57. The rating and review systems used by online platforms are instrumental in creating the trust necessary for consumers to engage in online transactions. To ensure transparency, however, we believe that all online platforms should have publicly accessible policies for handling negative reviews, and clearly distinguish between user reviews and paid-for promotions. We recommend that the Commission publish guidance clarifying how the Unfair Commercial Practices Directive applies to the rating and review systems used by online platforms.
Chapter 8: How to grow European platforms
58. European policymakers should not allow concerns about online platforms to obscure the fact that they are key drivers of competitiveness, productivity and growth. It is important that Europe develop its ability to compete in these markets. We therefore urge the European Commission, as part of its current and future work on online platforms, to prioritise actions that promote the emergence and growth of online platforms in Europe.
The UK’s strengths
59. The UK has a population of early adopters, the highest levels of e-commerce in Europe, a thriving tech start-up scene, exceptionally strong e-commerce and creative sectors, and is a world-leader in FinTech or Financial Technology services. As a result, the UK stands to gain more than any other EU Member State from the creation of a digital single market.
Create a Digital Single Market of 500 million consumers
60. Market scale is paramount for online platforms, whose value resides in the size of the networks they can create. The fragmentation of the European market in digital goods and services—with 28 different rulebooks— substantially limits growth and acts as an incentive for businesses to shift the locus of their operations to the US, to maximise their growth potential. We therefore strongly endorse the central aim of the Digital Single Market Strategy, which is to reduce regulatory fragmentation and remove barriers to cross border trade, and urge the Commission to retain a sharp focus on this over-riding purpose.
61. Initiatives in the Digital Single Market Strategy, particularly the greater harmonisation of contract law and consumer protection, are critically important to enabling digital tech start-ups and platforms to operate without friction across borders and to fully exploit a potential market of over 500 million consumers. We recommend that the Commission and the Government pursue an ambitious degree of integration in these areas, and resist a lowest common denominator approach.
Facilitate increased investment
62. We note the weakness of the European venture capital market compared to that of the US is a barrier to the growth of EU-based start-ups and scale- ups, and an incentive for emerging platforms to move to the US. This lack of investment is not unique to online platforms, and represents a major obstacle to generating economic growth across the Union. We therefore welcome the unprecedented large-scale action from the Commission to address this lack of investment through the Capital Markets Union, the €315 billion Investment Plan for Europe and its proposal to create a venture capital ‘fund of funds’.
63. We also note the difficulty of establishing small-scale investment funds in the UK, compared to the US. We recommend that the Government review the example provided by the US Jumpstart Our Business Startups (JOBS) Act, and consider whether comparable reforms could facilitate increased investment in UK-based start-ups and scale ups. (Paragraph 339)
Embrace the strategic role of innovation
64. If the European Union and its Member States wish to facilitate the growth of online platforms that can compete in these global markets, they must embed innovation at every level of policymaking. The need to update existing regulation in order to protect consumers and the competitive process should be carefully balanced with the need to promote innovation in these markets: we suggest that regulating after markets have matured may be preferable to adopting a more pre-emptive approach.
65. If the EU and its Member States can get this balance right, facilitate increased investment in digital tech firms, and—most importantly of all—create a scale market of 500 million consumers, Europe has the potential to play a leading role in the next stages of the digital revolution.
Chapter 9: Regulating online platforms
66. The rapid growth of online platforms has disrupted many traditional markets. It has also resulted in uncertainty about how existing regulation, designed in a pre-digital age, applies to these new disruptive business models. As a consequence there is a perception that large online platforms are above the law.
Responding to regulatory disruption
67. We do not consider that highly restrictive regulation that seeks to contain disruption would be the right response. It would risk entrenching existing market structures and make it difficult for new platforms to emerge, thereby discouraging innovation. Nonetheless, we acknowledge the need to protect fundamental rights and to ensure that existing regulation is effective and up- to-date.
68. In addition to the adaptations proposed elsewhere in this report, we recommend that the Commission, in concert with regulators at Member State level, critically review and refit existing regulation to ensure that its application to online platforms is clear. We believe that in many cases specific guidance from the Commission could provide this clarification.
69. As many concerns relate to the enforcement of existing laws rather than the content of those laws, we invite both the Commission and the Member States to consider whether providing regulators with increased resources would be a more efficient way to address concerns about enforcement than introducing additional rules.
70. We recommend that regulators robustly enforce against online platforms they believe to be in breach of the law. Enforcement authorities should sometimes proceed even where there is a risk of losing the case or having the outcome appealed—such outcomes help to clarify how the law applies. For this reason we welcome Commissioner Vestager’s decision to proceed with the Google case, without prejudice to the outcome.
71. Online platforms present regulators and enforcement agencies with multiple challenges, outlined in detail in this report. In addition to a perceived gap in enforcement, popular concerns about their use of personal data, disruption of traditional industries and corporate tax contributions have put pressure on policymakers to act at Member State level, resulting in increased regulatory fragmentation. Unless these concerns are addressed in a concerted way at a European level this fragmentation will continue to increase, undermining the possibility of creating a single market in digital goods and services.
72. While the Digital Single Market Strategy identifies specific policy interventions designed to achieve this goal, we consider that the political sensitivity of questions relating to online platforms, as well as their sheer variety, make reaching a consensus in this policy area difficult.
73. Although we welcome the Commission’s consultation as a valuable first step, we believe that it is too broadly designed to address these issues decisively. To support the growth of innovative online platforms across the EU in a sustainable way, we believe that the process of reviewing the effectiveness of existing laws in relation to online platforms must be continuous.
74. We therefore recommend that the European Commission appoint an independent panel of experts tasked with identifying priority areas for action in the digital economy and making specific policy recommendations.
75. The panel would consist of a representative group of independent experts with deep insight into the digital economy and the emerging challenges it presents, drawn from outside the Commission itself. It would be supported by staff that would enable it to effectively pursue its objectives, and would seek input from a wide range of specialists on specific issues. The panel would report annually to the European Commission, the European Council and the European Parliament.
76. The panel would act as a channel for public concerns, engaging with regulators, policymakers, businesses and citizens, but would then subject those concerns to rigorous and impartial analysis, before formulating its recommendations. In this way the panel would seek to build political consensus around its policy proposals, thus reducing the risk of regulatory fragmentation and removing obstacles to the creation of a Digital Single Market.
77. While the panel would set its own agenda, on the basis of this report we identify three subjects that require immediate consideration: • The effectiveness of enforcement in these markets, including whether enforcement agencies have the necessary powers and resources to act against abuse by the largest online platforms, and whether enforcement could be better co-ordinated across different jurisdictions and regulatory regimes; • The lack of competition between platforms on privacy standards, and how data portability requirements should apply to different types of online platform; and • Ways to open up access for emerging and disruptive innovation into the digital economy, including in areas such as the Internet of Things and the expansion of the collaborative economy into new sectors