‘What are they thinking of?’

This article explains the thinking underlying recent activism in digital markets by competition regulators – with reference to cases undertaken by the CMA, the European Commission and the US authorities, and to the new UK and EU regulatory regimes for competition in digital markets. It addresses some common misconceptions about competition authorities’ thinking on digital markets, and identifies strategies most likely to be effective for tech companies in dealing with competition authorities. It argues that: (i) the consumer and competition benefits brought by the tech industry are real and substantial; (ii) contrary to common belief, these benefits are recognized by competition authorities; (iii) recent competition regulatory activism should be understood in the context of a belief that it is necessary to preserve those benefits, by allowing new generations of tech disruptors to emerge; (iv) when tech companies face competition investigations or interventions, they should resist the temptation to kneejerk dismissal of all possible concerns, which is unlikely to be effective in advancing their business interests, because it misunderstands the authorities’ thinking; and (v) smarter strategies involve engaging with the specific facts of a particular case (economic, legal and technical) to challenge whether proposed interventions or remedies are, in reality, both effective and proportionate.