The Competition and Markets Authority (CMA) has announced that it will establish a new data unit this summer in order to enhance its ability to investigate the enforcement of digital competition law issues including the use of algorithms, Big Data and machine learning.
Digital issues have become an increasing focus of the work of competition authorities, both in competition cases or mergers, and in work on markets. For example, last year the CMA undertook a market study into digital price comparison tools, covering car insurance, home insurance, energy, broadband, flights, and credit cards (see here). This has led to the CMA opening a competition investigation into price comparison websites’ contracts with home insurers. The focus of the investigation (which is ongoing) is on clauses which limit insurers’ ability to charge a lower price on one platform than another (“most favoured nation/customer” clauses; see here).
Similar initiatives to the CMA’s data unit have been undertaken by other competition authorities in Europe and beyond. For example:
- A joint report into competition law and data was prepared by the German Bundeskartellamt(BKA) and the French Autorité de la concurrence (French Competition Authority) (see here and here), which provides an overview of the theories of harm raised by the use of data but does not reach specific conclusions – May 2016.
- A sector inquiry by the French Competition Authority into competition in the Internet advertising sector and the significance of data processing (see here and here) – started 2016.
- The Italian Competition Authority, together with the national regulators for communications and data protection, opened a joint market investigation into Big Data (see here) which “intends to assess whether, and under which circumstances, access to “Big Data” might constitute an entry barrier, or in any case facilitate anti-competitive practices that could possibly hinder development and technological progress. The analysis will focus on the impact of online platforms and the associated algorithms on the competitive dynamics of digital markets, on data protection, on the ability of consumers to choose, and on the promotion of information pluralism” – 2017.
- The Canadian Competition Authority released a report into Big Data and innovation, which concluded that “Big Data may implicate somewhat specialized and less familiar tools and methods, the traditional framework of competition law enforcement can usefully continue to guide the Bureau’s work.” (see here) – February 2018.
And the BKA has gone one step further, investigating Facebook for an abuse of dominance in the way it has used data on Facebook members gathered without consent from third party websites (see here).
The output of the CMA’s new data unit could be more investigations of individual companies for anti-competitive conduct and/or an increase in market studies focused on specific aspects of the digital sector. Given the challenges for competition authorities in establishing collusive agreements or conduct in relation to online activity (our thoughts on collusion through algorithms can be foundhere), an increase in market studies is perhaps a more likely outcome.
 Market studies can led to a range of outcomes including: competition enforcement action; a market investigation reference; or the acceptance of undertakings in lieu of market investigation reference (usually behavioural undertakings from the companies involved).