Big Data and Competition Law Preliminary thoughts

Transcription

1 Big Data and Competition Law Preliminary thoughts Competition Law Afternoon 22 September 2016 Hannele Huimala Jussi Nieminen 1

2 Data and Market Power the data advantage? Key question: Can a data set confer a dominant position? Data markets exhibit many characteristics which are not common for other assets / raw materials Low acquisition costs, value context-dependent, non-rivalrous, available Vestager 9 September 2016 (Copenhagen): [ ] the problem for competition isn t just that one company holds a lot of data. The problem comes if that data really is unique, and can t be duplicated by anyone else. But really unique data might not be that common. [ ] we do need to keep a close eye on whether companies control unique data, which no one else can get hold of, and can use it to shut their rivals out of the market. Very exceptional that dominance would be created by mere data. Data essential input only if unique and unmatchable (quality/quantity) Difficult to measure power of the data advantage: multi-homing, network effects, dynamic & constantly evolving markets 2

3 Data and Market Power why bother? Competition law may be relevant when DomCo: i. forecloses rivals by restricting access to data (exclusionary) ii. iii. uses M&A for anticompetitive accumulation of data (mergers) reduces privacy protection / degrades privacy policies (exploitative) However, competition law designed to pursue its own objectives - not those of privacy laws COMP/M Facebook/WhatsApp: Any privacy-related concerns flowing from the increased concentration of data within the control of Facebook as a result of the Transaction do not fall within the scope of the EU competition law rules but within the scope of the EU data protection rules. See also C-238/05: Asnef-Equifax. Privacy laws may nevertheless form an internal and external constraint for competition law (Costa-Cabral & Lynskey 2015) 3

4 Practitioner's Toolbox privacy laws as internal and external constraints for competition law? Internal constraint If conduct relates to personal data, legal context for the restriction set by data protection laws Data protection laws may act as normative mirror Analogous application of C-457/10 - Astra Zeneca? External constraint Competition on the merits v. access to data restriction acquired by deceit? Data protection laws limit scope of application of competition laws Privacy is a fundamental EU-right. Analogous application of C- 309/99 Wouters & C- 120/78 Cassis de Dijon? Legitimate aim v. infringement Protection of privacy: legitimate justification for conduct? 4

5 Exclusionary abuses suggested theories of harm Suggested theory of harm: Foreclosure of competitors by restricting access to data May take many forms: Exclusive contracts with third party service providers? Discriminatory access to data (Cegedim refusal to provide access to medical information database to a competitor at adjacent market)? Measures with the aim to restrict data portability / increase switching costs (FTC Google investigation: restriction of AdWords data portability)? Restricting access to an essential facility? No cases in the EU thus far 5

6 Exclusionary abuses - considerations Key question: how to choose the correct enforcement policy; incentives for innovation and investments v. enhancing short-term competition? Some forms of abuse more theoretical than others. For example, essential facility -abuse would be very complicated and require that i. The data trove possessed by DomCo is an essential input for competitors; ECJ-case law requires indispensability of the input high threshold considering the economic nature of data? ii. iii. Refusal to supply eliminates competition in the (downstream) market; There is no objective justification for the conduct nor any efficiencies to counteract the alleged negative effects to consumer welfare Data protection laws restrict transferability of personal data may be an objective justification but to what extent? Should the new product criterion of Magill/Microsoft apply or is intervention justifiable even without it? 6

7 Mergers suggested theories of harm OECD on mergers within data intensive industries (2015): the number of mergers and acquisitions (M&A) has increased rapidly from 55 deals in 2008 to almost 164 deals in 2012 Theory of harm: Anticompetitive accumulation of data? 7

8 DG COMP in Google/DoubleClick: Accumulation of data not seen as an issue: the combination of information on search behaviour and webbrowsing behaviour would not give a competitive advantage in the advertisement business that could not be replicated by other players that have access to similar web-usage data combination of data about searches with data on users web surfing behaviour is already available to a number of Google s competitors today [c]ompetitors may also purchase data or targeting services from third parties and [d]ata is also available from internet service providers Commission made it very clear that merger control policy should not be influenced by external factors 8

9 DG COMP in Facebook/WhatsApp Suggested theory of harm: anticompetitive data advantage leveraged to the provision of online add-services Commission: no problem i. There will remain a sufficient number of alternative online add-service providers ii. There are currently a significant number of market participants that collect user data alongside Facebook 9

10 Mergers - considerations Key points: High threshold for finding of data based SIEC in the context of data mergers Privacy policy should not be enforced with merger control rules Competition on privacy as a quality parameter of competition (degrading privacy)? Data driven markets have some particularities to be taken into account in the analysis Newcomers/ Maverick firms may play a larger role in comparison to traditional industries Quality & quantity of the combined data set at the center of the data advantage -analysis 10

11 Exploitative abuses suggested theories of harm and considerations Suggested theory of harm: Degrading privacy to the detriment of individuals Ongoing investigation in Germany concerning Facebook Very theoretical and practically problematic form of abuse How to define exploitative conduct and what is the relevant benchmark? When are e.g. terms and conditions excessive? Risk of false positive high DomCo intentionally collects information in violation of the privacy rules is competition law the correct instrument for intervention? 11

12 Thank you! 12