User Influencing and a Pragmatic Role for Competition Authorities

Over the past decade, user influencing practices have gained prominence in academic and digital policy debates in Europe. These practices include dark patterns, dark nudges, sludge, and highly personalised processes such as hypernudging. In essence, they rely on manipulating users’ cognitive and environmental constraints to steer their behaviour in a predictable manner. Growing empirical evidence of harms have triggered regulatory responses in the recent Digital Services Act, Digital Markets Act, Artificial Intelligence Act, and Data Act. In addition, the enforcement guidance documents were updated to sharpen the application of EU data protection and consumer laws to capture these practices. In this blog post, I focus on European competition law as an alternative instrument that has so far been largely overlooked in user influencing debates. As user influencing may lead to distortion of competition and consumer harm, competition authorities should take a more active, yet pragmatic, role in addressing these challenges.

User influencing as Abuse of Dominance

European competition law is a legal field most closely associated with tackling the negative manifestations of market power. Article 102 TFEU provides a prohibition against abuse of a dominant position by undertakings that reach a prescribed threshold of market power within a specific relevant market. While corporate bigness is not prohibited as such, dominant undertakings hold a special responsibility not to engage in abusive behaviour, which can broadly be divided into exploitative and exclusionary categories. The former relates to a dominant undertaking exploiting its customers directly e.g., through excessive prices, and the latter refers to artificially raising barriers to entry and expansion and excluding competitors from the market. To find Article 102 TFEU infringement, competition authorities are required to establish a logically consistent theory of harm, which must articulate how firms’ behaviour harms competitors and consumers. That is done in reference to different parameters of competition – price, choice, quality, and output – and ultimately, consumer welfare.

European competition law offers an original perspective for addressing user influencing practices. This is because harms to individuals (e.g., privacy violations, autonomy and choice limitations, financial loss) are linked to user influencing discourses but fall outside the scope of competition law enforcement. Nevertheless, in the digital economy, where user influencing can occur in a large-scale systemic manner, harms can have a collective dimension too (e.g., manipulation of the demand side of the market, discrimination). Collective harms are relevant in the context of European competition law. When viewed through an exclusionary abuse lens, user influencing could become the means for dominant undertakings to engage in abusive leveraging conduct, such as anticompetitive self-preferencing, algorithmic  tying and bundling, or algorithmic rebate schemes. It can also lead to exploitative abuses, such as personalised exploitation. In these circumstances there is nothing, in principle, precluding competition authorities from applying the existing theories of harm to user influencing practices that harm consumer welfare.

It follows that European competition law enforcement against harmful user influencing practices may be plausible, despite the availability of other regulatory instruments. This is because in the EU competition law and regulation are generally viewed as complementary to each other. In particular, as competition law and regulation have different goals, the latter, even when adequately enforced, does not necessarily address harms to competition and market structure. Competition law may also be enforced in regard to the issues that fall in the gaps of ex ante regulation or that are not sufficiently addressed by it. Furthermore, the case law confirms that Article 102 TFEU can be invoked irrespective of whether an undertaking conforms  with other relevant legal rules.

A Pragmatic Role for Competition Authorities

In this blog post, I argue that user influencing and its harms are multifaceted phenomena that require multifaceted solutions and competition law, too, has an active role to play. However, it must be underscored that there is a difference between what European competition law can do and what it should do. After all, when push comes to shove, enforcement authorities have limited resources and institutional constraints, requiring them to make strategic choices about cases to be pursued. Therefore, there is a need for competition authorities to adopt a pragmatic approach to user influencing challenges.

In this pragmatic approach, the role for European competition law is influenced by the evolving European regulatory landscape for digital markets – it is not considered in isolation. In particular, the emergence of new regulatory instruments underlines the increasing necessity for regulatory cooperation and coordination. For example, Recital 90 of the Digital Markets Act stresses the duty of sincere cooperation between the Commission and national authorities within the remit of their competences. The principle of the duty of sincere cooperation has also featured prominently in the seminal Meta Platforms Inc. v Bundeskartellamt case, which examined Meta’s abuse of a dominant position through its general terms and conditions, which, according to the German Federal Cartel Office, allowed the company to process and combine users’ personal data across its services in breach to the General Data Protection Regulation. In the preliminary ruling, the European Court of Justice confirmed that a national competition authority, acting in line with the duty of sincere cooperation with data protection authorities, may find a data protection infringement (paras 53-54). The judgement is significant because it highlights the importance of coordination between competition and data protection authorities and recognises a degree of convergence in enforcement in digital markets. It also leaves the door open to the question of whether the same reasoning could be extended to other areas of law, such as consumer protection.

Moreover, when authorities are responsible for enforcing different legal instruments at the same time, strategic decisions have to be made as to which one is best suited to a particular set of circumstances. The Federal Trade Commission’s lawsuit against Amazon for non-consensual enrolment in its Prime programme and for complicating the cancellation process for Prime subscribers through the alleged use of dark patterns is a salient example. The case, based inter alia on Article 5 a) of the FTC Act, not only demonstrates that user influencing is harmful to consumers, but also that there are synergies between consumer protection and competition law, and arguably sends a signal in relation to both.

Finally, recognising the need for cooperation and coordination in the enforcement of EU law in the digital sector, competent national authorities in different EU Member States have developed different solutions. In the Netherlands, for example, four independent regulators (ACM, AFM, AP and CvdM) established the Digital Regulation Cooperation Platform (SDT) in 2021. The SDT was set up to enable the authorities to coordinate their supervision of digital services, with the aim of promoting collective responses to digital issues (e.g., artificial intelligence, manipulation). Similarly, in January 2024, six German authorities launched the Digital Cluster Bonn initiative, to expand cooperation on all aspects of digitalisation. While these collaborative structures could be promising in enabling national competition authorities to play a more active role in user influencing discourses and legal debates, there remains a gap in EU-level coordination and cooperation mechanisms to facilitate the achievement of EU digital policy as a whole.

Concluding Remarks

In conclusion, in light of the ongoing developments related to user influencing online, a degree of regulatory cooperation and knowledge sharing is a necessary precondition to avoid siloed legal thinking on the issue and, in turn, to move away from piecemeal legal solutions. For a more dynamic and pragmatic approach development, competition authorities must nevertheless explore the missed opportunity of taking an active, yet pragmatic, role in relation to user influencing practices.

*Viktorija Morozovaite is a postdoctoral researcher at Utrecht University

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