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© 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

220 November 2017 Big Data: New Frontier For Competition Law

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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

|20 November 2017

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

Facebook

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

5Big Data: New Frontier For Competition Law20 November 2017

“

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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


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


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


The Washington Post

Forbes

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Big Data Driven RisksExamples


The New York Times

Channel 4

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Big Data Competition ConcernsExamples


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.


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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


| Big Data: New Frontier For Competition Law 1720 November 2017

Digital Economy And Consumer Welfare


EU Competition Law In Digital MarketsJohannes Laitenberger, 10 October 2017

“

”

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Joined Up Enforcement

Competition, Privacy and Consumer Laws



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


14 November 2017


Alec Burnside

Partner

Dechert LLP

[email protected]

+32 2 535 54 33

+44 20 7184 7444

mailto:[email protected]

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.

big data - dechert files/publication/2017... · big data new frontier for ... telefonica/vodafone...

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