Margrethe Vestager, EU Competition Commissioner, addressed Munich’s zeitgeist-setting Digital Life Design (DLD) Conference earlier this month on the question of data, competition and restrictions to market access.
The Commissioner raised a number of areas of potential competition concern, but she concluded that, to date, the use of ‘big data’ had not raised competition concerns. She also indicated that a number of the privacy issues in relation to data had been rather over-played.
Is ‘big data’ in the Commission’s crosshairs?
The key theme of her speech was that competition enforcement action could be taken if the control of data was restricted by a small number of companies, such that other companies were driven out of markets. However, to date, the Commission had not found evidence of this. She also emphasised that the Commission should not take enforcement action just because a company holds a lot of data.
This comment appears to be a riposte to more interventionist voices in the European Parliament (“EP”) and the European Data Protection Supervisor (“EDPS”). A report commissioned by the EP, and endorsed by the EDPS, found that European consumers suffer discrimination online due to lack of attention in the application of competition law, which it argued is demonstrated by an absence of uniform measures for reporting discriminatory practices and the lack of a harmonised approach to collective redress.
The Commissioner also went to some length to explain that any competition assessment of competition issues involving ‘big data’ will examine why competitors could not get hold of equally good information, as was the case in two previous merger cases: Google’s acquisition of DoubleClick, and Facebook’s purchase of WhatsApp. In neither case did the Commission consider there to be competition concerns in terms of access to data, as other companies would still have access to many sources of useful data.
Interestingly, she placed technology markets in a wider economic context, saying that these markets are no different from others but what is different is the pace of change. Although many online services are perceived as free to consumers, data is the currency with which they pay for these services. According to the Commissioner, this in itself is not a reason to treat such markets differently.
Are privacy standards being used to kill off the competition?
Positively for data-based businesses, she thought that privacy was an issue for regulation rather than competition enforcement. She also considered that the EU will soon have adequate data protection rules, with the adoption of the new General Data Protection Regulation, which is expected to be agreed later this year by the EP, the European Council and the Commission.
However, she also highlighted that the standardisation of internet privacy protection should not be done in a way that makes it harder for smaller players to compete.
So can we all move on now?
The Commissioner concluded her speech by observing that the Commission has not, as yet, found competition problems in relation to ‘big data’ and that Europe does not need a new competition rulebook for the ‘big data’ world.
However, the question of whether the aggregation of ‘big data’ is foreclosing (European) competitors from online markets is a key economic question of the moment and is also intensively political, as demonstrated by the Commissioner’s somewhat barbed comments. Given this wider policy environment, it is almost certain that the Commission will revisit these questions in the future.