© 2017 Dechert LLP
Advanced EU Competition Law
Focus Day – Competition Law in the Digital Era, 20 November 2017
Big DataNew Frontier for Competition Law
Alec Burnside, Partner Dechert LLP Brussels
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Overview
Big Data as a new market phenomenon: applying old rules to
new circumstances
Big Data as a source of efficiencies; an input; a commodity; a
barrier to entry
Online markets and offline welfare effects
Joined up enforcement of competition, privacy and consumer
laws
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Big Data As A New Market Phenomenon
Applying old rules to new circumstances
Big Data: New Frontier For Competition Law 320 November 2017
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BIG DATA AND PRIVACY
RISING TIDE OF CASES AND STUDIES
FTC 2008
Google/DoubleClick
Concern regarding
lack of meaningful
privacy choices for
consumers
EC 2008
Combination of
datasets
DG COMP 2014
Facebook/WhatsApp
Data and data
sharing requests
could be considered
as price
increases/quality
degradation; and
does the
combination of data
sources alter
competition?
2017 Reports
Canada
Japan
Netherlands
France 2014
Cegedim
Discriminatory
access to data
FCO Ongoing
Potential abuse for
violation of
consumers’ privacy
rights
2016 Reports
France/Germany
EDPS
OECD
UK
ECJ 2006
Asnef-Equifax
Sensitivity of
personal data not
‘as such’ a matter
for competition law
2014 Report
EDPS
DG COMP 2010
Microsoft/Yahoo
Efficiency defence
DG COMP 2008
TomTom/Tele Atlas
Efficiency defence
DG COMP 2012
Telefonica/Vodafone
Creation of a unique
database/essential
facility?
France 2014
GDF Suez
Cross-usage
of data sets
2010 Report
France
DOJ 2014
Bazaarvoice/Power-Reviews
Potential monopolisation of
data as a barrier to entry
2015 Report
CMA
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EU Competition Law Is Fit For PurposeJohannes Laitenberger, 10 October 2017
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“
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Big Data Benefits And Drawbacks
A source of efficiencies; an input; a commodity; a
barrier to entry
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Big Data Driven Innovation and SynergiesExamples
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SMART
CITIES
SMART
FARMING
Image Source: https://www.jct600.co.uk/blog/future-of-motoring/what-will-motoring-look-like-70-years-from-now/
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Big Data Driven Innovation and SynergiesExamples
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Hadoop Big Data Analytics
US regulators approve first digital pill
with tracking systemFT, 14 November 2017
Image Source: https://flic.kr/p/qWT78n
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Big Data Driven RisksExamples
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The Washington Post
Forbes
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Big Data Driven RisksExamples
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The New York Times
Channel 4
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Big Data Competition ConcernsExamples
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Possible Barrier
OR
Reduction of Quality
Competition
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Example DG COMP Decisions: Data Issues
MICROSOFT/LINKEDIN – 6 DECEMBER 2016
The EC examined the concentration of the parties’ user data with respect to four areas (1) online advertising services; (2) customer relationship management software solutions (‘CRM’); (3) professional social network (‘PSN’); and (4) productivity software solutions.
The market investigation confirmed that privacy is an important parameter of competition and driver of customer choice in the market for PSN services. The EC stated that to the extent that the post-transaction potential foreclosure effects “would lead to the marginalisation of an existing competitor which offers a greater degree of privacy protection to users than LinkedIn (or make the entry of any such competitor more difficult), the Transaction would also restrict consumer choice in relation to this important parameter of competition when choosing a PSN”.
To address the privacy concerns Microsoft offered a series of commitments. In dismissing the other data concentration concerns the EC relied on the fact that neither Microsoft nor LinkedIn made its data available for online advertising and that there were alternative sources of data available post-merger.
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Example DG COMP Decisions: Data Issues (cont’d)
FACEBOOK/WHATSAPP – 3 OCTOBER 2014
The EC noted that if a website, post-merger “would start requiring more personal data from users or supplying such data to third parties as a condition for delivering its ‘free’ product” then this “could be seen as either increasing its price or as degrading the quality of the product.”
The EC assessed the potential data concentration to the extent that it was likely to strengthen Facebook’s position in the online advertising market or in any sub-segments thereof, finding that:
Neither Facebook nor WhatsApp were selling the collected user date or offering data analytics services to advertisers as a separate product;
Besides Facebook, a sufficient number of alternative suppliers would continue to offer targeted advertising after the transaction; and
Large amounts of internet user data that are valuable for advertising purposes were not within Facebook's exclusive control.
In 2017, the EC fined Facebook for providing misleading information during the merger investigation, in particular about not being able to match the list of its users with the identity of the WhatsApp users.
Big Data: New Frontier For Competition Law 1320 November 2017
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Example DG COMP Decisions: Data Issues(cont’d)
TELEFONICA UK/VODAFONE UK/EVERYTHING EVERYWHERE/JV – 4 SEPTEMBER 2012
The EC assessed “whether the JV Co would foreclose competing providers of
data analytics or advertising services by combining personal information,
location data, response data, social behaviour data and browsing data and by
so creating a unique database that would become an essential input for
targeted mobile advertising that no competing provider of mobile data
analytics services or advertising customer would be able to replicate.”
The EC relied on the “essential input” concept concluding that information
available to the JV post-transaction will remain available to new and existing
competitors. Customers provide personal data to many market players and
“[s]ocial behaviour is also widely available through the consumers’ activities on
social networks (Facebook, LinkedIn, etc). Browsing data can be traced by
surfing through free browsing tools (Google), cookies, Apple iPhone browsing
history or the Facebook “like” button”.
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Example DG COMP Decisions: Data Issues(cont’d)
GOOGLE/DOUBLECLICK– 11 MARCH 2008
The proposed combination of Google’s online advertising and online
advertising intermediation activities with DoubleClick’s display ad serving
technology raised the possibility of foreclosure based on the combination of
DoubleClick’s and Google’s databases on customer online behaviour.
Addressing competitors’ concerns that such database combination would lead
to a market position that cannot be replicated, the EC found that the
combination of data regarding users’ searches with data about users’ web
surfing behaviour was already available or could be obtained through internet
service providers.
In the US, FTC Commissioner Pamela Jones Harbour raised privacy as part of
a competition law investigation for the first time: concern that the merger
wouldmay deprive consumers of meaningful privacy choices.
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Online Markets And Offline Welfare Effects
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Digital Economy And Consumer Welfare
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EU Competition Law In Digital MarketsJohannes Laitenberger, 10 October 2017
“
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Joined Up Enforcement
Competition, Privacy and Consumer Laws
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European Data Protection Supervisor: Big Data & Digital Clearinghouse
Attorney General of Missouri: Civil Investigative Demand Against Google
Federal Cartel Office, Germany: Facebook Investigation
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FCO, Press Release, 2 March 2016
”FCO, Big Data und Wettbewerb Report, October 2017
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Competition, Privacy, Consumer Laws and Democracy?
ANDREAS MUNDT: “deeply convinced privacy is a competition issue”
CCLP Conference, 22 May 2017
THE GUARDIAN
ANDREAS MUNDT, FCO
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14 November 2017
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Alec Burnside
Partner
Dechert LLP
+32 2 535 54 33
+44 20 7184 7444
For further information, visit our website at dechert.com.Dechert practices as a limited liability partnership or limited liability company other than in Dublin and Hong Kong.