Old Tools for the New Economy? Counterfactual Causation in Foreclosure Assessment and Choice of Remedies on Data-driven Markets

Under the recently proposed EU Digital Markets Act (DMA), ‘gatekeeper’ digital platforms have to comply with a number of ex-ante obligations, including narrow ex-ante data-sharing mandates that have been proposed as a viable solution to the phenomenon of data-driven market tipping. Digital platforms will also be subject to ex-post competition interventions, some of which are already ongoing. Given that both ex-ante regulatory and ex-post competition enforcement can address the issue of data-driven market tipping, there is a significant chance that thought from one policy domain will influence the other. This can be readily seen in the DMA, which heavily borrows from competition doctrine.Such intellectual cross-fertilization needs to be approached with care, however. For one, the objectives and reasons of existence of the two domains are different. Second, data-driven markets are dynamic and always evolving, which means that rigorous ex-post effects analysis that does not simply fall back on ideas and practices from ex-ante regulation is of pivotal importance for i) correctly assessing anti-competitive behavior and ii) devising an appropriate ex-post remedy. This latter point can be seen with regard to data-sharing mandates, which will continue being important as possible ex-post competition remedies even after the adoption of the DMA with its ex-ante solution in that regard. However, a fine-grained, effects-driven assessment of the need for data sharing obligations in an ex-post enforcement setting will be vital, given new political and business-led data-sharing initiatives, novel techniques for generating synthetic data, and companies’ increasing skill at drawing powerful conclusions from small data sets.In sum, authorities need to proceed carefully with regard to ex-post interventions in dynamic data-driven markets already governed by ex-ante obligations, in particular in two respects: i) establishing that abuse of dominance has taken place (especially given that ex-ante obligations will soon be in place) and ii) choosing the right remedies if such abuse is found. With regard to the former, we propose a ‘multiple counterfactual causation test’ for establishing anticompetitive foreclosure. With regard to the latter, we maintain that ex-post data-sharing mandates should only be imposed after careful proportionality analysis vis-à-vis the counterfactually identified abusive behavior; otherwise, they are unlikely to be effective remedies and other remedial actions need to be considered