ERBE

What is the definition of regulation?

Regulation is defined as:

• A type of legislation.

• A binding legislative act.

• It must be applied immediately by all European countries.

Why regulate?

Regulation is primarily aimed at addressing market failures or imperfections in the market. It is used to:

• Correct inefficiencies like natural monopolies, externalities, public goods, asymmetric information, and moral hazards.

• Align private and social costs (e.g., through taxes or restrictions).

• Overcome global challenges like environmental problems that require worldwide coordination.

• Ensure societal goals like reducing inequality, improving competition, and safeguarding public welfare.

How does regulation manifest itself?

Regulation manifests through various interventions, such as:

• Setting price floors (e.g., minimum wage).

• Specifying qualifications (e.g., professional licenses).

• Controlling the number of market participants (e.g., taxi licenses).

• Ensuring product safety (e.g., pharmaceuticals, toys).

• Controlling pollutants (e.g., sulfur dioxide emissions).

• Providing information (e.g., labeling requirements).

• Controlling prices (e.g., for local telephone services).

• Ensuring equal opportunities (e.g., banning employment discrimination).

What does regulation assume & what are its limitations?

• Assumptions of Regulation:

  • Efficiency in the market can be achieved under certain conditions:

    • Perfect competition.

    • Absence of externalities.

    • Complete information for buyers and sellers.

  • Regulation assumes rationality in decision-making by individuals and organizations.

• Limitations of Regulation:

  • Regulations may not always achieve the desired outcomes and can have unintended consequences, such as:

    • Creating loopholes that are exploited by market participants.

    • Encouraging over-optimism in behavior (e.g., feeling safer with seatbelts leading to riskier driving).

  • Individuals may deviate from rational behavior due to bounded rationality or time-inconsistent preferences.

  • Global problems, such as environmental challenges, require international cooperation, making regulation less effective on a national level.

  • Designing effective regulations can be complex due to interactions between market actors and potential resistance from vested interests.

How can regulation negatively impact the market?

Regulation can negatively impact the market by:

• Raising barriers to entry for new firms, particularly smaller companies, due to compliance costs (e.g., eco-responsible production regulations).

• Reducing competition, as overly strict or excessive regulations can lead to monopolistic behavior or deter market participants.

• Unintended consequences, such as creating inefficiencies, encouraging non-compliance, or fostering complacency among regulated entities (e.g., seatbelt regulation making people feel safer but increasing risky driving behavior).

How to optimize regulation implementation?

Optimizing regulation implementation involves:

• Evidence-based policymaking: Ensuring that regulations are grounded in empirical data and clear objectives (e.g., the "Better Regulation" agenda of the EU).

• Stakeholder involvement: Engaging citizens, businesses, and other stakeholders in the decision-making process.

• Regulatory Impact Assessments (RIA): Conducting thorough assessments during the planning phase to evaluate environmental, social, and economic impacts, particularly on small and medium enterprises (SMEs).

• Simplifying laws: Avoiding unnecessary burdens and ensuring transparency in regulatory frameworks.

Which institutional organ & legislation ensure fair competiti

• Institutional organs:

  • The European Commission ensures the proper application of EU competition rules.

• Legislation:

  • Article 101 TFEU: Prohibits anti-competitive agreements between firms, such as cartels and collusion.

  • Article 102 TFEU: Prohibits abuse of a dominant market position by firms.

  • Merger and acquisition rules: Prevent excessive consolidation that could reduce competition in the EU.

The European Commission also monitors state aid, mergers, and cartels through its enforcement powers, including inspections, hearings, and granting exemptions.

How can state aid lead to competition inefficiencies?

State aid can cause competition inefficiencies by:

• Distorting market dynamics: Providing selective advantages to certain firms, industries, or regions, which undermines fair competition.

• Favoring specific entities: For example, tax relief or direct grants to specific companies can tilt the playing field and stifle innovation and efficiency.

• Disrupting trade: Preferential treatment for domestic firms can negatively affect cross-border trade within the EU.

Can state aid be regulated? If there are exceptions, explain!

• Yes, state aid can be regulated:

  • Article 107(1) of the TFEU prohibits state aid that distorts competition and affects trade between EU Member States.

• Exceptions:

  • Article 107(2): Allows aid with a social character or to remedy damage caused by natural disasters or exceptional occurrences.

  • Article 107(3): Permits aid that promotes:

    • Economic development in underdeveloped areas.

    • Projects of common European interest or remedies serious disturbances in a Member State's economy.

  • General Block Exemption Regulation (GBER): Allows specific categories of aid (e.g., for SMEs, R&D, environmental projects) without requiring prior notification if certain conditions are met.

What is the definition of industrial policies?

Industrial policy refers to:

• Government policies aimed at transforming the structure of economic activity in pursuit of public goals such as innovation, productivity, economic growth, climate transition, or reducing regional inequalities.

• Involves targeting specific technologies, sectors, or firms using tools like taxes, subsidies, regulations, and public investments.

• Examples include support for renewable energy, specific industries, or lagging regions.

Does industrial policy aim at promoting industrialization?

• Not necessarily.

  • Industrial policy is broader than just promoting industrialization.

  • It targets structural changes in the economy, such as encouraging innovation, developing digital skills, or addressing climate transitions.

  • While industrialization can be a component, the focus is often on achieving public goals like reducing carbon emissions or enhancing economic resilience.

What are the pros and cons of industrial policy?

Pros:

• Encourages innovation and technological advancement.

• Stimulates economic growth and productivity.

• Can address market failures like externalities, public goods, or coordination problems.

• Helps promote strategic goals, such as reducing dependency on foreign suppliers (e.g., during supply chain disruptions).

• Can reduce inequalities and support lagging regions or underdeveloped areas.

Cons:

• Risk of “choosing winners”: Governments may misallocate resources or make decisions based on political pressures rather than market efficiency.

• High potential for inefficiencies and failures, as many past industrial policies did not achieve intended outcomes.

• Risk of distorting competition if policies favor certain sectors or firms disproportionately.

• Implementation challenges, such as difficulties in assessing impact and unintended side effects.

What guidelines should be considered when designing industrial policy?

Key guidelines for designing effective industrial policies:

1. Explicitly identify market failures: Clearly define the problem to be solved to ensure targeted and effective interventions.

2. Use independent experts: Select projects based on evidence, ex-ante evaluations, and peer reviews to minimize political interference.

3. Consider supply and demand factors: Ensure sufficient research capabilities and avoid focusing solely on demand.

4. Adopt competition-neutral policies: Prevent favoritism to protect market dynamics and economic efficiency.

5. Include ex-post evaluations and sunset clauses: Regularly review policy effectiveness and set timelines for their withdrawal if no longer needed.

6. Involve the private sector in risk-sharing: Engage private investors to enhance feasibility and reduce reliance on public funds.

7. Anticipate economic structural changes: Account for evolving market conditions and technological advancements.

What key changes have led to new focuses in industrial policy?

Major shocks and long-term trends have influenced shifts in industrial policy focus:

• 2008 Global Financial Crisis: Highlighted the need for stronger economic resilience.

• COVID-19 Pandemic: Disrupted supply chains and emphasized strategic autonomy, particularly in critical sectors like healthcare and technology.

• Climate change: Prompted policies to promote green transitions and sustainability.

• Digital transformation: Increased focus on fostering innovation in digital technologies.

• Geopolitical tensions (e.g., trade disputes and war in Ukraine): Amplified awareness of strategic dependencies and the importance of autonomy in key areas such as energy, rare earths, and cybersecurity.

What are the key characteristics of civil law?

• Codified system: Laws are written into codes (e.g., civil code, criminal code).

• Judges play the role of investigators: They establish facts and apply the codified laws rather than creating them.

• Judges are typically career judges and there are no juries.

• Origin: Developed from Roman law and codified in systems like the Napoleonic Code (1804), which spread to many countries.

What are the key characteristics of common law?

Common Law:

• Judge-made law: Relies on legal precedents (stare decisis) established by courts.

• Based on adversarial systems: A contest between two opposing parties moderated by a judge.

• Judges are selected through recognition systems, and cases often involve juries.

• Origin: Developed in England and spread to Anglo-American jurisdictions

Why does court matter? How is it measured?

Why Courts Matter:

• Courts enforce contracts and protect property rights, encouraging investment and economic development.

• Judicial independence and efficient courts foster economic growth by ensuring fair and predictable resolutions to disputes.

How Is It Measured?

• The EU Justice Scoreboard measures the efficiency, quality, and independence of justice systems across Member States.

• Metrics include the length of court proceedings, availability of resources, and access to justice.

• Tools like the Doing Business Report (discontinued in 2021) ranked economies on indicators like contract enforcement and dispute resolution efficiency.

What is the definition of a contract?

A contract is:

• a contract is a specification of actions that named parties must take under various conditions.

• It typically includes:

  • Actions (e.g., delivery of goods, payment of money).

  • Parties (e.g., buyer and seller).

  • Conditions (e.g., contingencies under which actions are performed)

Why do we need a written contract?

• Written contracts are needed to:

  • Specify future provisions or timing of goods/services (e.g., delivery schedules).

  • Enable efficient risk-sharing between parties (e.g., insurance agreements).

  • Reduce uncertainty and resolve differences in opinions, particularly regarding future outcomes or pricing.

• Written contracts formalize agreements, making them easier to interpret and enforce.

Why is the enforcement of contracts desired?

• Contract enforcement is crucial for:

  • Guaranteeing Pareto efficiency: Resources are allocated efficiently so that no one can be made better off without making someone else worse off.

  • Encouraging investment and trade by reducing risks of default or fraud.

  • Preventing opportunistic behavior:

    • Without enforcement, a borrower might keep money without repayment.

    • Sellers might fail to deliver goods/services as promised.

  • Discouraging price hold-up: Ensures fair pricing and prevents exploitation after one party has incurred costs.

How can contracts be enforced?

• Contracts can be enforced through:

  • Private mechanisms:

    • Reputational consequences.

    • Informal discussions or community norms.

  • Governmental mechanisms:

    • Courts resolve disputes and enforce compliance.

    • Regulators ensure adherence to specific contractual obligations (e.g., consumer protection agencies).

• While courts are often the primary institutions for enforcement, both public and private mechanisms have limitations:

  • Private mechanisms may devolve into violence or coercion.

  • Courts may face inefficiencies or corruption.

What are the purposes of tort law?

Tort law aims to:

• Internalize costs: Ensure that both injurers (firms) and victims bear the costs of harm, encouraging them to take appropriate levels of care.

• Induce efficient precautionary behavior by making the injurer liable for damages caused by negligence or strict liability.

• Address externalities: Encourage firms to take actions that consider the societal costs of harm they might cause.

• Compensate victims for damages and injuries caused by accidents or defective products.

How will the product price be affected under strict liability and negligence rules?

Strict Liability Rule:

• Under strict liability, firms are required to pay for total social costs(both production costs and expected accident losses) regardless of their level of care.

  →Firms will incorporate these total costs into the product price. Example:

  • If production costs are €10, care costs are €2, and expected accident losses are €3, the price will be €15 under strict liability.

Negligence Rule:

• Under the negligence rule, firms must pay damages only if their level of care is below a defined due care standard.

  →Firms will take due care to avoid liability, resulting in lower expected accident costs.

• Example:

  • If production costs are €10 and care costs are €2, the price will be €12, as firms avoid liability by meeting the due care standard.

How do costs vary if victims are customers?

If customers are victims:

• Costs to firms depend on:

  • Liability: Whether firms are held liable for accidents caused by defective products.

  • Customer knowledge: If customers are aware of product risks, they may adjust their willingness to pay, influencing market competition.

• Perfect knowledge of risks:

  • Customers fully understand the risks associated with products.

  • Firms will naturally adopt optimal care, even without liability, because customers prefer safer products and adjust their purchase decisions accordingly.

• Imperfect knowledge of risks:

  • Customers are unaware of the risks or firms’ efforts to make products safer.

  • Firms have no incentive to incur costs for safety unless liability rules require them to take care.

  • Liability becomes essential to ensure firms adopt optimal levels of care.

What are possible challenges in case of accidents?

Challenges include:

• Judicial errors:

  • Courts might struggle to determine the optimal level of care or accurately assess negligence, leading to errors in rulings.

• Quantifying damages:

  • While economic damages (e.g., medical costs, lost income) are relatively easier to compute, non-economic damages (e.g., pain and suffering) are subjective and harder to quantify.

• Costly litigation:

  • Legal processes can be expensive and time-consuming for both victims and firms.

• Misaligned incentives:

  • Strict liability might discourage firms from producing high-risk but socially valuable products, while negligence rules may fail if courts cannot accurately assess due care.

• Information asymmetry:

  • Customers may lack sufficient knowledge about product risks, leading to inefficiencies in markets and potential under-investment in safety measures by firms.

What are historical key moments that pushed for stronger regulation?

• Thalidomide Scandal (1960s):

  • A sedative and painkiller, widely prescribed to combat insomnia and nausea (especially for pregnant women), caused severe birth defects (phocomelia).

  • Over 10,000 newborns were affected, with underdeveloped or no limbs.

  • This event led to tighter safety and efficacy regulations for pharmaceuticals, making drug approval processes more rigorous.

• Introduction of Regulatory Agencies:

  • The European Medicines Agency (EMA) in the EU and the Food and Drug Administration (FDA) in the US were established to ensure drugs are both safe and effective before market entry.

• Vioxx Withdrawal (2000s):

  • A painkiller, Vioxx, was linked to an increased risk of heart attacks, highlighting flaws in post-market surveillance and the need for stricter approval processes.

What is preferable, errors of type one/type two?

Type I Error:

• Approving a bad drug that causes harm.

• Example: Vioxx, which was approved but later linked to fatal side effects.

Type II Error:

• Rejecting a good drug that could have benefited patients.

• Example: A potentially life-saving drug that is not approved due to stringent safety requirements.

Which is preferable?

• Regulators face a trade-off:

  • Type I errors risk patient safety and public trust in regulators.

  • Type II errors delay potentially beneficial treatments, particularly for life-threatening conditions.

• Preference depends on the context:

  • For severe illnesses with no alternatives, minimizing Type II errors might be prioritized.

  • For general-use drugs, minimizing Type I errors might be more critical to prevent widespread harm.

What are the main steps to develop a new drug?

• Discovery and Preclinical Testing:

  • Identifying a promising compound and testing its efficacy and safety in laboratory and animal studies.

• Clinical Trials:

  1. Phase 1: Testing on a small group of healthy individuals to assess safety.

  2. Phase 2: Testing on a larger group of patients to evaluate efficacy and side effects.

  3. Phase 3: Large-scale testing to confirm effectiveness, monitor side effects, and compare with existing treatments.

• Regulatory Approval:

  • Submitting data to regulatory agencies (e.g., EMA, FDA) for review and approval.

• Post-Market Surveillance:

  • Monitoring long-term effects and identifying rare side effects after the drug is marketed.

what are the steps for the non-clinical phase?

1)    Discovery: How difficult can this step be?

Very difficult: e.g., screening of 5,000 to 10,000 compounds in the drug discovery process might lead to approx. 250 compounds to the pre-clinical step

2) Development: After identifying a promising compound for development, researchers conduct experiments to gather information several things such as:

·   How it is absorbed, distributed, metabolized, and excreted.

·   Its potential benefits and mechanisms of action.

·   The best dosage.

·   Side-effects.

·    Effectiveness in comparison with other drugs.

·     Interaction with other treatments and drugs.

3)   Safety and efficacy tests: Before testing a drug in people, researchers must find out whether it has the potential to cause serious harm, also called toxicity.

It is necessary to test it in animals to show it is not toxic.

Other than regulated drug development, how can the pharmaceutical industry be regulated?

• Marketing Regulations:

  • Restrict direct-to-consumer advertising (common in the US but not allowed in the EU).

  • Limit incentives (e.g., free samples or gifts) provided to healthcare professionals to reduce conflicts of interest.

• Patent and Intellectual Property Laws:

  • Manage exclusivity periods to encourage innovation while ensuring affordability through generic drug production.

• Transparency Requirements:

  • Mandate public disclosure of clinical trial results to improve accountability and patient safety.

• Competition Policies:

  • Prevent monopolistic practices, such as blocking the entry of generics or engaging in anti-competitive pricing strategies.

How can the price of pharmaceutical products be regulated?

• Reference Pricing:

  • Governments set drug prices based on prices in other countries or comparable treatments.

• Price Caps:

  • Imposing maximum allowable prices for specific drugs, especially those that are life-saving or widely used.

• Negotiation with Manufacturers:

  • Governments or health systems negotiate prices with pharmaceutical companies to ensure affordability (e.g., bulk purchasing agreements).

• Encouraging Generic Production:

  • After patent expirations, generics can significantly lower prices.

• Subsidies and Reimbursement Policies:

  • Governments subsidize drugs for low-income patients or include essential medications in public healthcare reimbursement schemes.

How does AMR affect our current landscape?

• Antimicrobial Resistance (AMR) undermines the effectiveness of antibiotics and other antimicrobial drugs, threatening the ability to treat infections.

• It contributes to a growing public health crisis, increasing mortality and healthcare costs.

• AMR creates a pressing need for innovation in developing new antimicrobials and alternatives to traditional antibiotics.

What measures were introduced to foster innovation for antimicrobial development?

• Public incentives to encourage research and development in antimicrobial drugs, given the lack of profitability in this area for private companies.

• Regulatory bodies and governments have introduced grants, prizes, and push-pull mechanisms to stimulate innovation.

• Collaborative initiatives at global levels to share data and pool resources for research.

What’s the difference between development of regular vaccines and COVID-19’s?

• Speed:

  • Regular vaccine development typically takes years due to rigorous clinical testing and regulatory processes.

  • COVID-19 vaccines were developed in record time, with emergency processes such as overlapping clinical trial phases and accelerated regulatory reviews.

• Funding:

  • COVID-19 vaccine development saw unprecedented global funding and public-private collaborations.

• Technology:

  • Novel platforms like mRNA vaccines were deployed for COVID-19, representing a significant shift from traditional vaccine methods.

What has COVID-19’s impact been on industrial policy?

• COVID-19 emphasized the need for strategic autonomy and resilience in supply chains.

• It prompted governments to invest heavily in domestic manufacturing of critical goods, such as medical equipment and vaccines.

• Industrial policies shifted focus to support rapid innovation, particularly in healthcare and technology sectors.

• The crisis highlighted the importance of public-private partnerships in addressing global challenges.

Efforts at EU versus US level?

• EU:

  • Coordinated vaccine development and procurement through centralized mechanisms like the EU Vaccine Strategy.

  • Focused on achieving open strategic autonomy to reduce dependence on external suppliers.

• US:

  • Operated through initiatives like Operation Warp Speed, providing significant funding to accelerate vaccine development and production.

  • More reliance on private-sector partnerships for innovation and distribution.

What is the conditional marketing authorization in context to COVID-19?

Conditional Marketing Authorization (CMA):

• A regulatory mechanism that allows for the temporary approval of vaccines and drugs based on preliminary evidence of safety and efficacy.

• It was used during the COVID-19 pandemic to enable rapid deployment of vaccines while longer-term data collection continued.

• Aimed at balancing urgent public health needs with ongoing safety monitoring.

To what implications has COVID-19 led for drug and vaccine development?

• Increased innovation:

  • Accelerated the adoption of new technologies like mRNA platforms.

• Streamlined processes:

  • Highlighted the possibility of faster regulatory pathways without compromising safety.

• Global collaboration:

  • Strengthened international partnerships in research, funding, and distribution.

• Resilience focus:

  • Encouraged investments in infrastructure and manufacturing to prepare for future pandemics.

Why is the non-market environment equally as important as the market environment?

• The non-market environment includes interactions with governments, regulators, media, and public opinion, which significantly influence business success.

• Non-market factors can shape:

  • Regulatory frameworks and compliance requirements.

  • Public perception of the company, affecting brand reputation and consumer trust.

  • Access to markets through policies, subsidies, or trade agreements.

• Ignoring the non-market environment can lead to regulatory challenges, loss of social license to operate, or reputational damage.

How can media impact the non-market environment?

Media plays a critical role by:

• Shaping public opinion: Positive or negative coverage can influence public sentiment and, indirectly, policymaking.

• Acting as a watchdog: Exposing corporate misbehavior or regulatory violations, pressuring companies to align with societal expectations.

• Amplifying stakeholder voices, such as activists, employees, or consumers, to increase scrutiny on a business’s practices.

• Influencing policymakers and regulators by highlighting issues of public concern.

What are the main steps of CBA (Cost-Benefit Analysis)?

• Identify Objectives:

  • Define the purpose of the analysis and the decision to be evaluated.

• List Costs and Benefits:

  • Identify all costs (e.g., financial, environmental, social) and benefits (e.g., economic growth, social welfare) associated with the action or policy.

• Quantify Costs and Benefits:

  • Assign monetary values to the identified costs and benefits, where possible, to allow comparison.

• Discount Future Values:

  • Use a discount rate to account for the time value of money, making future costs and benefits comparable to present values.

• Perform Sensitivity Analysis:

  • Assess how results vary with changes in assumptions or variables (e.g., discount rates, cost estimates).

• Make Recommendations:

  • Compare the net benefits (benefits minus costs) to make informed decisions on whether the policy or action is justified.

What possible challenges does the digital revolution and digital market pose?

• Data Privacy and Security:

  • The increased use of personal data raises concerns about misuse and inadequate protections.

• Market Concentration:

  • Dominance of a few large tech companies can reduce competition and stifle innovation.

• Regulatory Lag:

  • Regulations often fail to keep up with the rapid pace of digital innovation.

• Inequality:

  • Uneven access to digital technologies exacerbates socio-economic disparities.

• Job Displacement:

  • Automation and AI adoption can lead to significant changes in employment structures.

What are different costs of the digital economy?

• Replication Costs: Near-zero cost of duplicating digital goods (e.g., software, media).

• Search Costs: Reduced by algorithms and platforms facilitating faster access to information.

• Tracking Costs: Incurred by firms for personalized marketing and user analytics.

• Transportation Costs: Eliminated for digital goods but exist for physical deliveries in e-commerce.

• Verification Costs: Costs of ensuring trust, security, and authenticity in digital transactions (e.g., encryption, fraud prevention).

How did tracking cost in the digital age affect regulation?

The ability to track user behavior at low costs has led to:

• Stricter privacy regulations (e.g., GDPR) to protect individuals from excessive data collection and misuse.

• Enhanced transparency requirements, such as mandatory disclosures for data usage and processing.

• Increased scrutiny on antitrust practices, as detailed tracking enables dominant firms to leverage user data for competitive advantage.

How do lower regulation barriers to firm entry and competition tend to enhance digitalization?

• Lower barriers:

  • Encourage startups and SMEs to enter the market, fostering innovation and competition.

  • Allow for quicker adoption of digital technologies as new entrants drive efficiency and innovation.

  • Reduce costs associated with compliance, enabling firms to focus on scaling digital solutions.

• Increased competition leads to better services and reduced prices, promoting further digital adoption.

Why isn’t the GDP the best metric to measure the digital development?

• Intangible Contributions:

  • The digital economy relies heavily on intangible assets, such as software, data, and algorithms, which are not fully captured in traditional GDP metrics.

• Non-Market Activities:

  • Many contributions of the digital economy, such as user-generated content and free services like social media platforms, are not directly accounted for in GDP calculations.

• Cross-Border Transactions:

  • The global nature of digital services, such as cloud computing and e-commerce, makes it difficult to attribute economic activity to specific countries, leading to underestimation in GDP measurements.

• Rapid Technological Advancements:

  • Falling costs of digital technologies (e.g., software or cloud services) can mask their true value in GDP calculations, as price deflation reduces their apparent contribution.

• Consumer Welfare Gains:

  • The digital economy significantly enhances consumer welfare (e.g., access to information, time savings), which is not reflected in GDP.

• Lagging Metrics:

  • Statistical methods used to measure GDP have not fully adapted to the dynamics of the digital economy, leading to gaps in capturing its impact.

What is the Digital Services Act package, and what are its main goals?

• Components:

  • Digital Services Act (DSA)

  • Digital Markets Act (DMA)

• Goals:

  • Create a safer digital space to protect users' fundamental rights.

  • Establish a level playing field for innovation, growth, and competitiveness in the EU and globally.

When did the DMA enter into force, and what is the timeline for compliance?

• Timeline:

  • Entered into force: 1 November 2022.

  • Applicable from: 2 May 2023.

  • Firms have 2 months to notify the Commission if they meet gatekeeper criteria.

  • The Commission has 45 working days to designate gatekeepers.

• Compliance: Designated gatekeepers must comply with obligations within 6 months.

What is a gatekeeper under the DMA?

• Definition: Large digital platforms offering core platform services (e.g., search engines, app stores, messenger services).

• Criteria:

  • Substantial impact on the internal market.

  • Operates as an important gateway for businesses to reach users.

  • Entrenched and durable market position.

• Obligations: Must comply with the DMA’s “do’s” and “don’ts.”

Provide examples of the “don’ts” (obligations) for gatekeepers under the DMA.

• Cannot treat their own products or services more favorably in rankings.

• Cannot prevent users from linking to businesses outside their platform.

• Cannot restrict users from uninstalling pre-installed apps.

• Cannot track users across platforms without effective consent.

How does the Digital Services Act (DSA) ensure a safer online environment?

• Scope: Applies to online intermediaries, marketplaces, social networks, content-sharing platforms, and app stores.

• Main Goals:

  • Prevent illegal activities and harmful content.

  • Safeguard user safety and fundamental rights.

  • Ensure a fair and open online ecosystem.

What are Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs) under the DSA?

• Platforms or search engines with more than 45 million monthly active users in the EU (10% of the population).

• Pose higher risks for spreading illegal content and societal harms.

• Subject to stricter obligations under the DSA.

What measures do the DSA and DMA take to foster innovation and competition?

• DSA: Regulates harmful content to maintain a fair platform environment.

• DMA: Limits the power of gatekeepers, ensuring smaller firms can compete and innovate.

Describe the importance of compliance reports under the DMA.

• Gatekeepers must document their efforts to comply with DMA obligations.

• Reports highlight actions taken to ensure fairness, transparency, and non-discrimination.

• Example: Changes in ranking algorithms or labeling products (e.g., Amazon's updates to avoid bias).