Vertical Interoperability and the Digital Markets Act: A Critical Analysis

The European Commission has identified the lack of interoperability as a major barrier to a successful digital economy. Additionally, EU policymakers have recognized that digital markets evolve too quickly for regulation to be effective if it relies solely on ex-post measures. This has led to a shift towards adopting ex-ante measures for more proactive regulation, exemplified by the Digital Markets Act (DMA). This essay supports the need for vertical interoperability in digital markets, arguing that concerns about potential drawbacks—such as efficiency losses, privacy risks, and reduced incentives for gatekeepers to innovate—are exaggerated. It explores how the DMA promotes vertical interoperability from both theoretical and practical viewpoints. While acknowledging the strengths of the DMA’s provisions, the essay contends that its impact is limited by narrow drafting on a theoretical level. On a practical level, the effectiveness is further constrained by the excessive discretionary power granted to gatekeepers and the unreasonable fee structures.