Through independent research carried out in Bavaria, a bidt project is helping to improve the regulation of digital markets and tech giants. An interdisciplinary team is already working intensively on this topic. The aim of the project is to feed the findings into political and regulatory processes at European level. In this interview, business IT specialist Jan Krämer and antitrust lawyer Leonie Ott provide an insight into the groundwork being carried out.
The enormous market power of a handful of digital corporations such as Meta, Google, Amazon and Apple is not only a concern for EU bodies. The bidt-funded project ‘Resilient Regulation for Digital Markets’ (RESREG) is also conducting research into the conditions for fair competition. The Bavarian researchers are distinguished by their independence, as Professor Jan Krämer, Professor of Business Informatics at the University of Passau, explains in an interview with the bidt.
The European Commission has a strong interest in ensuring that as many independent researchers as possible address the topic of ‘the regulation of digital markets’. After all, it is no easy task to take on and regulate the world’s largest and most powerful tech companies. In that respect, we are truly an independently funded consortium.
Prof. Dr. Jan Kraemer To the profile
Independent research versus economic interests
The ‘regulation’ examined by the project encompasses legislation, technical standardisation and self-regulation by the platforms. This broad approach is made possible by an interdisciplinary team that combines its expertise to carry out a comprehensive analysis. Professor Thomas Ackermann, Chair of Civil Law, European and International Business Law at Ludwig Maximilian University, and Leonie Ott, a research assistant at the same institute, are responsible for the legal aspect – competition law.
As a business IT specialist, Professor Krämer brings proven expertise in the areas of digital business models, technical standardisation and the economic mechanisms of digital markets. Another key area of his research focuses on the regulation of digital companies and platforms. Also involved in the project is business IT specialist Marcin Roter, a research assistant at the University of Passau. The perspective of self-regulation is being examined by Professor Tobias Kretschmer from the Institute for Strategy, Technology and Organisation at Ludwig Maximilian University of Munich, and by Chengdi Fa, a research assistant at the same institute. Professor Kretschmer also acts as the project leader for this initiative, which was selected following a call for proposals by the bidt and commenced work in April 2024.
The opportunities and challenges of interoperability
Although the team is examining regulation from various angles, their work centres on one key aspect: interoperability. This means, for example, that it should be possible to send a WhatsApp message to another messaging service such as Signal or Threema – something that is not currently possible. In this case, the term ‘horizontal interoperability’ is used, as it involves systems at the same level. Vertical interoperability refers to a connection between different types of products – for example, when headphones from Company A pair with a smartphone from Company B.
The basic idea behind the Digital Markets Act is to make the digital market more open to competition again. We would see more innovation if we had more competition. Interoperability is one of the keys to breaking up monopolies – by giving others access once more to the digital ‘infrastructures’ provided by the most powerful companies in the market, on which we all depend.
Prof. Dr. Jan Kraemer To the profile
Nevertheless, interoperability – as initial project findings have shown – also has its problematic aspects. For example, switching from one messaging service to another could lead to more spam and thereby lower security levels. Under the Digital Markets Act, WhatsApp, for instance, must create an interface with other messaging services, but security must not be compromised. “That’s actually technically impossible,” says Krämer. Another aspect is that many other, smaller messaging services do not want this interchange at all – for example, if their brand promise is to be more secure than their major competitor.
The gap between regulation and practical implementation
The discrepancy between the regulatory requirements for interoperability and their practical implementation was the focus of a workshop organised by the project last autumn at Ludwig Maximilian University in Munich. Participants included, amongst others, a lawyer with many years’ experience advising Google, as well as Kaja Schmidt from the European Commission, who deals with interoperability procedures. Among the issues discussed was whether, and to what extent, Google should be obliged to grant manufacturers of vehicle and navigation systems access to Google Maps data. Various perspectives were examined – ranging from the fundamental legitimacy of such an obligation to the technical requirements for its implementation. The discussion highlighted the complex conflicting objectives associated with the practical design of interoperability requirements:
A legal obligation to ensure interoperability does not guarantee that the effects promoting competition will automatically materialise. If implementation is too complicated and, as a result, nobody makes use of it, little is gained. The outcome of the workshop therefore met our expectations: it all comes down to the technical details.
Leonie Ott LL.M. (Cambridge) To the profile
Experiment on standardisation processes
The project also delves even deeper into the issue of interoperability: how are the technical standards developed that enable the products of tech giants and smaller competitors to work together? The legislator merely prescribes the obligation to ensure interoperability. The technical details are then left to standardisation bodies, which comprise technical experts and company representatives – for whom the challenge often lies in reaching agreement and disclosing the issues at hand.
Within the RESREG project, there is an empirical research group currently working on an experiment, as Krämer explains. The aim is to simulate the standardisation process and run through decision-making scenarios – for example, what outcomes does a majority vote or a required two-thirds majority produce in this field characterised by conflicting interests?
The researchers will then examine how voting rules influence the quality of the agreed technical standards. In another line of inquiry, the empirical research group focused on self-regulation. Among other things, it investigated the effects on user behaviour and the digital market when platforms impose rules on themselves.
Laws: between generality and specificity
A key challenge lies not only in the practical implementation of regulatory requirements, but also in their very formulation. Should rules be formulated in rather general terms, as is the case, for example, in European competition law? Or are specific requirements preferable, such as those contained in the Digital Markets Act? Broadly worded regulations offer the advantage of greater flexibility and adaptability. At the same time, their interpretation in individual cases can lead to protracted legal proceedings. Concrete requirements, on the other hand, create greater legal certainty and clarity, but are less adaptable when new technological developments – for example in the field of artificial intelligence – give rise to new regulatory requirements.
This tension forms the overarching context of the project, and there will be no simple answer. The conflict of objectives between specificity and generality runs through every discussion of good regulation.
Leonie Ott LL.M. (Cambridge) To the profile
Finding resilient principles
Amid the tension between broadly worded laws and specific regulations, the RESREG research project is investigating which robust and resilient principles should guide market regulation – and, where possible, withstand future challenges. “The whole AI revolution that is taking place is not conceptually reflected in the Digital Markets Act,” notes Krämer. In doing so, he emphasises the practical relevance of the RESREG project:
We are examining the regulation of digital markets within the specific framework of European legislation. Our aim is to feed the insights we have gained back to decision-makers. In doing so, we are, in a sense, trying to operate with an open mind and provide as concrete and practical guidance as possible on how this regulatory process can be improved. A key focus is also on the question of how future-proof the existing regulations are and how resilient they can be in responding to new and rapidly evolving market changes.
Prof. Dr. Jan Kraemer To the profile
Further information
Preparations are already underway for the conclusion of the three-year project, which is scheduled to end in spring 2027. A major stakeholder workshop is planned in Brussels, at which the research findings will be presented and key problem areas as well as conflicting objectives within existing regulatory approaches will be highlighted.
To the Research project
