The quest for a fair price in the digital world

The EU Digital Markets Act (DMA) includes a wide range of behavioural and structural remedies applied to digital ‘gatekeepers’ in an attempt to stem what is perceived to be unfair practices by large Internet platforms.

While many of these remedies set out obligations on the gatekeepers with clear ‘bright line’ tests for compliance, a subset of the remedies require the gatekeepers to trade with other companies on a ‘fair, reasonable and non-discriminatory’ (FRAND) basis. 

In this article we explore how such FRAND obligations could be assessed for compliance, both by the gatekeepers themselves and by regulatory authorities. We find that even in the simplest cases, where existing services will become regulated, there are significant issues in determining whether the terms offered, including pricing, are FRAND compliant. In other areas, where gatekeepers will be obliged to create new products on a FRAND basis, there are significant conceptual issues that need to be addressed before any determination that the products are, or are not, FRAND compliant.

Given the likely resource constraints following the implementation of the DMA, regulatory authorities may not prioritise addressing complex issues such as FRAND compliance. However, gatekeepers will need to put in place processes for determining whether their offers are compliant with the DMA, including whether these offers are fair, reasonable and non-discriminatory. Third parties that feel they’re being treated unfairly will also likely start filing complaints fairly swiftly once the DMA comes into force. The EC will therefore need to begin grappling sooner rather than later with the host of complex challenges that FRAND raises.

Read more in our full article.