Interoperability regulations for digital services Impact on competition, innovation and digital sovereignty especially for platform and communication services
Digital markets exhibit strong concentration tendencies and a development towards increasingly interlocked, closing ecosystems.
In this study, carried out for Bundesnetzagentur, (a lack of) interoperability (IOP) is examined as a possible cause or driver of such concentration tendencies and the need for corresponding IOP obligations is analysed. In addition to the goals and possible positive effects of such regulations, a number of risks are also elaborated. On the one hand, IOP can enable the use of previously firm-specific network effects for more market participants at the horizontal and vertical level and thus reduce lock-in effects. At the vertical level, it can often create innovation incentives and modular combination possibilities across upstream and downstream market stages. At the horizontal level in particular, however, there can also be a restriction of differentiation and innovation possibilities, since IOP requires a certain degree of homogenisation, especially when, from a technical point of view, strong standardisation is necessary to achieve effective IOP.
In addition to technical, economic and legal foundations of IOP and its impact on services of the platform economy, the focus of the study is particularly on online communication services and number-independent interpersonal telecommunication services (NI-ICS), for which an IOP obligation was most recently established in the Digital Markets Act (DMA). Although the market for online communication services is strongly shaped by services of the Meta group, the costs for multi-homing (the parallel use of different services) as an alternative to IOP are low here and it is accordingly prevalent. On the other hand, due to the high technical complexity of such services, there are a number of costs and risks to IOP obligations that give rise to fears of possible reductions in the level of security, usability and market acceptance, among other things. Against this background, the upcoming practical implementation should be closely accompanied by regulation in order to minimise the identified risks as best as possible.