Digitalisation is advancing inexorably in many sectors of the economy. Prices are increasingly being set on the basis of algorithms. Streaming services and video platforms such as Netflix and YouTube are gaining ground with viewers and are increasingly replacing traditional television. In the supply of medicines, online retail is increasingly complementing the services provided by high-street pharmacies. The resulting structural change must be shaped in the interests of consumers, with fair rules for both established and new providers. In its 2018 main report, the Monopolies Commission therefore recommends adapting the legal framework to the digital transformation. It presented its report today to the Federal Minister for Economic Affairs and Energy, Peter Altmaier.
Specifically, the expert panel proposes:
- Markets with algorithm-based pricing should be systematically examined for distortions of competition. To enable this, greater use should be made of sector inquiries by competition authorities, which allow competitive distortions to be identified.
- to harmonise the regulatory framework for audiovisual media services more closely and to restrict the online offerings of public service broadcasters to socially and culturally relevant content,
- to reform the remuneration system in the supply of medicines and to refrain from introducing a ban on the mail-order sale of prescription medicines.
Many consumers are increasingly shopping online. There, pricing is increasingly determined by algorithms. Pricing algorithms can automate the coordination of prices and thus technically accelerate the process, for example when retailers use the same algorithm or when algorithms adapt prices to others through self-learning. The consequences are borne by consumers, for example in the form of inflated prices. The Monopolies Commission recommends systematically monitoring markets prone to coordinated pricing. The competition authority’s instrument of sector enquiries is particularly well-suited to this purpose, as companies are required to provide information to the Federal Cartel Office. Consumer protection organisations, which are most likely to come across information on potentially coordinated prices, could be granted the right to initiate sector inquiries by the competition authorities.
In the audiovisual media sector, the distribution of content via the internet is booming. This has led to an increase in media offerings, thereby strengthening diversity of opinion. Although traditional television continues to dominate the consumption of moving images, However, particularly among the younger population, the average daily use of online videos has risen significantly from 30 minutes in 2016 to 59 minutes in 2017. This is also reflected in the sharp rise in turnover in the video streaming sector. In view of the increasingly changing usage patterns, particularly amongst the younger generation, and the growing convergence of media, the regulatory framework for traditional television and online audiovisual services, such as Netflix and YouTube, should be harmonised to a greater extent. In principle, uniform regulations on the protection of minors and consumers, as well as on advertising, should apply to audiovisual media services. In this regard, advertising time restrictions in traditional television should, in particular, be lifted. The liberalisation and increased flexibility envisaged at European level do not go far enough. In view of the numerous private-sector online services, licence-fee-funded broadcasters should focus on so-called ‘public-value’ content.
