Breakups of Digital Gatekeepers under the Digital Markets Act: Three Strikes and You’re out?

Even though the European Commission has successfully defended cases of abuse of dominance under Article 102 of the Treaty of the Functioning of the European Union against online platforms in the European Court of Justice, it has been questioned how efficient the imposed remedies have been in restoring competition in these digital markets.

Based on an interpretation of the limitations to remedy design imposed by the principles of proportionality, necessity, and effectiveness, this article argues that there are three factors that are relevant when considering breakups for systematic non-compliance under Article 18 of the Digital Markets Act.

The three key factors for evaluating whether divestiture is an appropriate remedy in case of systematic non-compliance by a gatekeeper are identified as follows: (i) whether it concerns repeated infringement of the same or of several different obligations; (ii) the type of obligations the non-compliance concerns; and (iii) the relative costs and benefits in the specific platform market.

The analysis of the conditions for imposing divestiture as a remedy under the Digital Markets Act makes an important contribution to a little-explored enforcement aspect of this new Regulation.