Big Data

Competition Considerations

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Data important to business model in certain sectors

“Gigantic datasets … extensively analysed using computer algorithms”*

What is Big Data?

Big Data growing rapidly: McAfee: companies that make the most of their data are 5% more

productive and 6% more profitable than their competitors IDC: big data will generate $125 billion in 2015; will grow worldwide

at CAGR of 40% (about seven times that of the ICT sector overall)

but let’s be considered in assessing potential harm

* Article 29 Working Party, Opinion 2013

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Transform Europe's service industries by generating a range of innovative information products and services

Increase productivity of the economy through improved business intelligence

Help to address many challenges E.g., Environmental, cybersecurity, traffic

management Improve research and speed up innovation

E.g., health and epidemiological research Reduce costs through personalized services Increase efficiency in the public sector

McKinsey: possible savings of up to €300 billion a year in the EU

Advantages of Big Data

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Competition Law and Big Data

Fundamental question – what is ‘big data’? Not only personal data; also includes aggregated and

anonymised data sets Used as an input in many industries (not only GAFA)

Online advertising – used to target ads FMCG (incl loyalty schemes) – inventory management and targeting ads Travel and local (incl user reviews and frequent flyer schemes) – load/inventory

management eMedicine and other eServices - personalisation and real-time management of

patients Search data – used to improve tail query results

Nature of the data is important Not a new phenomenon Volume of data generated and analysed is new, as are some uses

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Data is an “input” – nothing about it warrants departure from normal application of competition rules

DG COMP has considered data as an input in a number of cases, most recently, Facebook/WhatsApp

Data increasingly used to monetise multi-sided online markets (where one side is “free” and another pays), such that the data is critical to both sides: On consumer side – improves relevance/ quality of service

(attracting and retaining users) On merchant/advertiser side – delivers targeted

advertising/offers (attracting advertisers) Consumers (on “free” side) can provide data directly (e.g., in user

profiles) or indirectly (e.g., what they view/listen to, where they go) One data set can be used in multiple markets

Competition Law and Big Data

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Like other inputs there are key threshold questions to imposing an obligation to share data (Bronner framework, essentially): Replicability

User multi-homing Multiple layers in stack have/access same data

Exclusivity Degree to which data is important to competing in a

downstream/related market Assess each type of data in context of market in issue – need to

understand how each market functions, parameters of competition, sources of data and market positions of entity(ies) to determine potential for competitive harm

Competition Law and Big Data

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Competition concerns may arise Exclusive access to data used to raise rivals’ costs or otherwise

disadvantage rivals (preventing entry and expansion) Reviewed in Google/Doubleclick, M-commerce, Publicis/Omnicom

Potential network effects – where entity has market power that enables control over further data collection, incentives (and ability) to exploit existing power might increase Reviewed in Google/Doubleclick, Facebook/WhatsApp

Potential cross-platform network effects – e.g., advertising and user services Under consideration in Google search

Potential scale effects – e.g., tail search queries Under consideration in Google search

Competition Law and Big Data