Big Data - A Hot Potato

The issue of data as an asset has become a hot topic in the European Commission and among national authorities. Both the European competition authorities and the data protection authorities are keeping an eye on how companies use data. For example, the national competition authority in Germany, the Bundeskartellamt, is investigating whether Facebook has abused market power by imposing unfair privacy terms.

At the moment, there is no coherent European wide approach, and the European Commission is now considering whether to propose legislation that would authorise national authorities to take action against potential antitrust abuses of data.

Collection vs Use of Data

The European approach has been described in a couple of recent speeches given by Commissioner Margaret Vestager. According to Commissioner Vestager, there is great potential in big data. It may well allow for welfare-enhancing innovations and improvements that smaller sets of data might never give rise to. However, data is a raw material that cannot be owned and does not wear out like conventional commodities or assets.

From a competition law point of view, there is nothing wrong with collecting and holding even significant amounts of data as such, especially if that data is not purely unique.

What should be carefully looked at, however, is the way in which the holder of valuable data chooses to use that data. Competition rules can be enforced against companies that use unique data in a way that undermines competition and hurts consumers. Ultimately, that could involve, for example, foreclosing competitors by restricting access to unmatchable data, buying up a rival in order to get hold of its valuable data or perhaps even facilitating coordination by giving away overly detailed information about one’s own business.

Big Data, Competition and Privacy

The rise of big data onto the radar of the European authorities effectively means that companies working with large data sets need to conform not only to privacy and consumer protection rules, but also to competition rules. Although these are inherently different sets of rules, they all share the same end goal of fairness and consumer welfare. It is worth keeping in mind that leveraging one’s strong position to degrade privacy policies or to otherwise reduce privacy protection could also be considered a breach of competition rules.