Output / Policy Brief
Practitioner’s Guide on Designation of Core Platform Services
Insights from the EU DMA for AfCFTA and COMESA Competition Regimes
In 2022, the European Union’s (EU) Digital Markets Act (DMA) became the first ex-ante legislation to regulate designated digital gatekeepers operating in the EU digital market, ensuring contestability and fairness. While other countries, such as Korea and India, have abandoned their draft Digital Market Competition Regulations (DMCR), which mirrored the EU DMA, and resorted to using their ex-post competition legislations to regulate competition in digital markets, in Africa, similar to the EU DMA, the Common Market for Eastern and Southern Africa (COMESA) and the African Continental Free Trade Area (AfCFTA) have introduced provisions in their competition legislations to regulate designated gatekeepers.
Regulation 38 of the COMESA Competition and Consumer Protection Regulations (CCPR) grants the COMESA Competition and Consumer Commission (CCCC) the power to regulate gatekeepers operating a core platform service (CPS) that serves as an important gateway for business users to reach end-users, and that enjoys an entrenched and durable position in its operations or is likely to do so in the near future. Article 11 of the Africa Continental Free Trade Area (AfCFTA) Competition Protocol (CP) will, for the first time, regulate designated core platform services and gatekeepers.
The designation of core platform services and gatekeepers under the DMA, which underpins the AfCFTA Secretariat and COMESA, has been marred by controversy. In some cases, the undertakings have successfully contested the EU Commissions’s designation of their services or products as core platform services.
This report, drawing on the EU Commission’s designation decisions and contestations of undertakings, offers a practical roadmap for the AfCFTA Secretariat and CCCC to inform the gatekeepers’ core platform service designation process. Such analysis bridges theory and practice and provides undertakings with practical guidance on the potential designation of their core platform services.
Key takeaways from the EU Commission’s core platform service designation decisions
Drawing on the EU Commission’s experience with core platform service designation and contestation by undertakings over the designation of their services and products as CPSs under the DMA, the following key takeaways for policymakers can be identified:
a) Core platform service designation is a prerequisite to the gatekeeper designation process
The CPS designation process involves identifying, categorizing, and delineating CPSs. Under the DMA, the designation is critical because CPSs are not only the object of the DMA regulation but also determine the specific obligations under Articles 5, 6, and 7 that the gatekeeper must comply with. Also, under the DMA, some CPSs carry heavier obligations than others.
b) What constitutes a core platform service is based on the actual use of business users and end users, rather than the service or product’s original design purpose.
Not all digital products or services provided by an undertaking will constitute a CPS. The EU DMA’s experience shows that whether a product or service constitutes a CPS is determined by its role in facilitating commercial or professional transactions between end users and business users.
c) Core platform service categorization is based on the actual features and functionalities of the core platform services, not simply the primary purposes for which the core platform service was designed
Under the DMA, only services identified under Article 2(2) – online intermediation services; online search engines; online social networking services; video-sharing platform services; number-independent interpersonal communication services (NIICS); operating systems; web browsers; virtual assistants; cloud computing services; and online advertising services–can be subject to the CPS designation process. To qualify a service as falling under the specific CPS categorization, the EC categorizes each CPS based on its purpose, characteristics, and functionalities, and not simply the primary purposes for which the CPS was designed,
d) Where an undertaking is offering multiple services in an integrated way, the core platform service will be accurately delineated as either single or distinct
The EU Commission's experience shows that when business users and end users appear to use CPS for different purposes, such CPSs are considered distinct, even when their business and end users are the same and are offered in an integrated way by an undertaking.
Insights from the EU Commission’s CPS designation decision for the AfCFTA and COMESA
Drawing on EU Commission’s CPS designation decisions, this report recommends that the AfCFTA Secretariat and CCCC identify the digital services or products offered in the African market by African and international tech companies to determine which constitute a CPS, appropriately define and categorize the CPS based on their actual roles and functionalities, and determine how they will delineate multiple products and services offered by a single undertaking in an integrated way.
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