Investigators:
Cristina Poncibò and Umberto Nizza

Abstract:
The digital market has experienced tremendous growth in recent years, and with this growth has come increased scrutiny of antitrust practices. Regulators in both Europe and the United States have levied significant fines against digital market players for antitrust violations. This paper explores the similarities and differences between European and American antitrust fines in the digital market and analyzes their deterrence results.

The research finds that both Europe and the United States have similar objectives when it comes to antitrust fines in the digital market. Both aim to protect consumers, promote competition, and prevent anti-competitive behavior. However, the way in which they achieve these objectives and the deterrence results they achieve differ significantly. European antitrust fines tend to be larger and more frequent than their American counterparts, which means they can have a greater impact on digital market players. In this respect, the EU’s recent Digital Markets Act seems to confirm the European approach and raises additional questions and complexities. The size and frequency of fines in Europe are designed to discourage anti-competitive behavior and promote competition by leveling the playing field for smaller players in the market. As a result, European fines have prompted some digital market players to change their business practices and have led to greater scrutiny of market practices.

In contrast, American antitrust fines tend to be smaller and less frequent, which can make them less effective in deterring anti-competitive behavior. This is partly due to the higher burden of proof required by American regulators for antitrust violations, which can make it more difficult to prove their case. Additionally, American regulators have traditionally been more focused on protecting innovation and market efficiency than promoting competition, which means that they may be less likely to levy significant fines against digital market players.

Despite these differences, the crucial question to explore is how the European and American antitrust fine models have had a deterrence effect. Measuring deterrence is inherently challenging, as it requires information on changes in future behavior of market players because of competition authorities’ actions. However, it is possible to note that there is a broad literature on cartel deterrence, an emerging literature on merger deterrence, and very little evidence on the deterrent effects of interventions tackling other anticompetitive agreements and the abuse of dominance. The reasons are the relatively low volume of infringement decisions in antitrust and the high heterogeneity of theories of harm
that characterize such interventions, making them more difficult to study. Nonetheless, European fines have prompted some digital market players to change their business practices, and American fines have discouraged some anti-competitive behavior. However, the deterrence effect has been limited, and many digital market players continue to engage in anti-competitive behaviors.

In conclusion, while European and American antitrust fines in the digital market have similar objectives, their deterrence results differ significantly. European fines tend to be larger and more frequent and are more focused on promoting competition, while American fines tend to be smaller and less frequent and are more focused on protecting innovation and market efficiency. Both types of fines have had some deterrence effect, but the deterrence results have been limited. As the digital market continues to grow and evolve, it will be essential for regulators in Europe and the United States to continue to work together to ensure that the market remains competitive and consumer-focused.