Should competition authorities be considering big data?
Published on 14th Oct 2014
We recently considered the US Federal Trade Commission’s approach to the use by big data companies of consumer data http://bit.ly/1scAntH.
Last week, the same merger was also granted clearance by the European Commission. As expected, the EC considered the competition consequences of acquirer’s increased access to consumer data. The EC considered whether the acquirer’s enhanced data feed might lead to anti-competitive effects in the supply of online advertising space and concluded that, given the number of alternative suppliers, the transaction did not raise competition concerns.
But what of the protection of consumer privacy in relation to the data? The EC declined, in this case, to delve any further into the realms of consumer privacy protection, stating that consumer privacy issue falls outside of the remit of the competition authority.
It is clear, however, that both the use of consumer data and privacy issues surrounding the use of that data remain very much on the European agenda. The incoming European Competition Commissioner, Margrethe Vestager, made very clear in a hearing before the European Parliament last week that big data is a priority area for the Commission. “I very much recognise the profile of big data as being the next big currency of the internet”, she said, in support of her statement that the EC needs to develop a deeper understanding of the markets for big data. Unlike the FTC, whose mandate extends to consumer protection issues, DG Comp’s remit is limited to ‘pure’ competition issues; however, Vestager assured the European Parliament that data privacy will not go unnoticed. DG Comp will work closely with DG Justice (responsible for consumer protection and fundamental rights within the EU) to ensure data privacy is given due regard in the big data era.
Just days after the EC’s decision, Alex Chrisholm (Chief executive of the UK’s Competition and Markets Authority), in a speech entitled ‘Looking ahead: preparing for the digital economy’, suggested that the CMA, which presides over UK consumer protection policy, might also have appetite for review of consumer privacy issues relating to use of big data. Whilst not delineating the regulators’ remit in relation to the consumer privacy protection, he stated that consumers are witnessing a “seemingly inexorable drive to gather our personal data by internet companies” and questioned whether consumer consent is being eroded.
The rising importance of data is driving many significant mergers in the tech sphere, leading to a blurring of the lines between traditional competition law, data and consumer protection. This in turn raises the question of whether our competition regulators should be ruling on wider consumer and privacy issues in the context of big data mergers. We welcome the comments of the EC and UK regulators that they will be considering this point and look forward to further clarity on their approach to future transactions.