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The anti-steering provision of Article 5 (4) of the DMA: a law and economics assessment on the business model of gatekeepers and business users

Author

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  • Christian Rusche

    (German Economic Institute (IW))

  • Jeanne Mouton

    (GREDEG, Université Côte d’Azur (France))

Abstract

Data is a success factor for digital platforms and the core of their business model. The rationale behind this is that data allows for improving the matching process between users which creates value for the platform. Since some large platforms act as gatekeepers, the Digital Markets Act (DMA) was introduced in Oct. 2022 to ensure a fairer business environment. This paper analyzes the consequences of the 4th obligation of Art. 5 of the DMA. Using a simple game theory model, we analyze the changes in incentives for different business models implied by the obligation. In fact, the obligation increases the incentives for the business users to use the platform because new customers can be acquired. The incentives for establishing an independent web shop also increase. Furthermore, more data is available, both for the platform and the business users. However, the platform is likely to benefit more from the increase in data collection and is incentivized to become vertically integrated. Finally, the fees imposed by the platform may increase.

Suggested Citation

  • Christian Rusche & Jeanne Mouton, 2024. "The anti-steering provision of Article 5 (4) of the DMA: a law and economics assessment on the business model of gatekeepers and business users," European Journal of Law and Economics, Springer, vol. 57(1), pages 207-237, April.
    • Handle: RePEc:kap:ejlwec:v:57:y:2024:i:1:d:10.1007_s10657-023-09784-7
    DOI: 10.1007/s10657-023-09784-7
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    More about this item

    Keywords

    Digital economy; Digital regulation; Competition law; Game theory;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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