Data Power is also Competition Law

Research. With digitalisation of the economy use of data is not longer a matter for primarily data protections regulators. Competition is also relevant, according to this research paper from the German and French competition authorities, identifying the key issues and parameters needed to be considered assessing the interplay between data, market power and competition law.

New use of data like real-time location data, cross-device tracking of a users, machine learning and the sheer volume of data makes increases the economic relevance of data. To date, the risk of foreclosure associated with the concentration of data in digital industries has mostly been looked at in the context of merger control. This does not exclude the use of antitrust enforcement tools to tackle behavior related to the collection and processing of data, similarly to what has already occurred in some non-digital markets. There are several possible “data-based” conducts, which could lead to enforcement action.

Two aspects are of particular relevance when looking at data’s contribution to market power: the scarcity of data or ease of replicability, on the one hand; whether the scale/scope of data collection matters, on the other.

Multi-homing by customers as well as the diversification of services offered by a single firm provides opportunities for the concurrent collection of user-specific data.

The availability of data from third parties, such as data brokers, can counteract data accessibility concerns, but the impact of such external sourcing may vary depending on the nature of the data concerned, applicable rules – contractual or regulatory – protecting user privacy and the general reluctance of firms to share their “data advantage” with competitors.

The scale and scope of data required must also be ascertained. The relevance of data as a strategic input and the opportunities for foreclosure depend in part on the volume levels: (i) at which a firm can reap the economic benefits of data; (ii) beyond which these benefits decline or cease to exist altogether.

A significant and recurring volume of data may need to be collected before attaining this threshold. The scope of data may likewise prove as important as scale and can warrant, depending on the market conditions and the case at hand, further scrutiny.

Read the research paper Competition, Law and Data, May 10tt 2016

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