European Union and United States: Antitrust and Data

Enhancing consumer welfare is at the heart of competition law. Of the many facets that can be considered as consumer welfare, changes in price and output are the easiest to measure and have, therefore, traditionally been the de facto benchmark for assessing anticompetitiveness. There are two current trends disrupting this: first, a debate as to whether other elements of consumer welfare should play a greater role, particularly treatment of customers’ data; and second, the importance of big data in maintaining competitive markets. These trends are reflected in the growing regulatory scrutiny of big tech firms, the focus of antitrust regulators on the digital economy and the ever increasing importance of data protection regulation. This chapter provides an overview of the current activities of the EU and US regulators in cases at the intersection of competition law and data issues. Many of the developments can be seen in the regulators’ enforcement of the merger control laws, but there have also been significant developments in the antitrust arena more broadly.

Merger control

The European Commission (EC) has the ability to review mergers, acquisitions and joint ventures between companies that have revenues in the European Union above certain thresholds. The EC has the power to require remedies to address any anticompetitive effects, or in the absence of suitable remedies, prohibit transactions. Similarly, the US Federal Trade Commission (FTC) and Antitrust Division of the Department of Justice (DOJ) can review transactions satisfying certain asset and turnover thresholds, with the power to seek a court injunction (or agree to modifications of transactions) where any competition concerns arise.

In recent years, the authorities on both sides of the Atlantic have routinely been considering big data in merger reviews, analysing it from two main angles. First, an approach adopted by both the EC and the DOJ/FTC: whether bringing together two companies with significant datasets could result in an excessively strong market position, referred to as a ‘horizontal’ issue in antitrust parlance as the consolidation is at the same level of the value chain. Second, an issue historically investigated more enthusiastically by the EC than the US authorities, is whether a merged entity could and would withhold access to its data to the detriment of rivals and effective competition, known as a ‘vertical’ issue, as one party is upstream of the other in the value chain. Both of these issues can be seen in a number of high-profile investigations, including in the EC’s on-going investigation into Google/Fitbit and its previous decisions in Facebook/WhatsApp, Microsoft/LinkedIn and Apple/Shazam.

In addition, the antitrust authorities routinely consider the implications of a merged entity obtaining confidential information about its competitors when it is acquiring a supplier or customer of its competitors, and often impose confidentiality obligations to resolve these concerns. These remedies are based on well-established principles and not related to ‘big data’, and so are not discussed further here.

Horizontal concerns – dataset combinations

As noted above, both EU and US authorities have investigated whether merging parties could derive an anticompetitive level of market power as a result of combining their datasets. In recent years, despite some lengthy investigations, neither authority has imposed antitrust remedies for an amalgamation of big data, generally relying on the fact that the datasets were not unique.

European Commission

In both Facebook/WhatsApp[1]and Microsoft/LinkedIn,[2] the EC dismissed the fact that any data combination would have such adverse effects, on the grounds that large amounts of other internet user data would remain available to competitors outside the exclusive control of Facebook and Microsoft respectively. [3]

In Facebook/WhatsApp, the EC specifically assessed whether the merged entity could use WhatsApp user data in conjunction with Facebook data to increase its ability to compete in the advertising market. This was rejected because such conduct would have required a change in WhatsApp’s privacy policy (potentially leading to consumers changing to alternative providers), and even if Facebook were capable of automatically matching users’ WhatsApp and Facebook profiles (a capability confirmed in the EC’s subsequent procedural investigation),[4] there would be no anticompetitive harm in the advertising market as a result.

The EC has raised a similar concern in its on-going in-depth review of the Google/Fitbit transaction,[5] alleging that Google’s acquisition of Fitbit could give it a ‘data advantage’ in targeting its online search advertising and make it difficult for competitors to match Google with similar targeting. Google’s attempt to address such concerns through formal submission of commitments to keep the Fitbit data separate from other Google datasets and not use it for advertising purposes (all for a five-year period) was rejected. Market participants claimed that the dataset combinations would create a worryingly strong player in the market and a promise about advertising activities alone would be insufficient to address their concerns. This is part of the broader concern that the Google/Fitbit dataset combination would lead to dominance in the digital healthcare sector in Europe, particularly given Fitbit’s offering of health wearables (including three new devices launched in August 2020). Whether the EC’s concerns are upheld after an in-depth investigation and the explanation provided in the final public decision will be extremely interesting and influential in how future cases are analysed.

In more recent cases, the authorities have started to evaluate the effects of combining datasets using the industry recognised metrics known as the ‘four Vs’: the variety of data; the velocity at which the data is collected; the volume of data in the set; and the value of the data. These criteria are used to establish whether the datasets changing hands can be considered ‘unique’ and therefore conferring a ‘data advantage’. This appears to be the evolving basis for the legal test of whether dataset combinations have the potential to be anticompetitive. It is predicated on the basis that a large dataset could translate into market power. In comparison, a company’s past performance in the market (measured by the proportion of customers or share of the total value of sales in the market) has traditionally been used as a benchmark for assessing whether the company has market power. This leap, from assessing market power based on past performance to assessing it based on the ability to monetise a dataset, represents a significant conceptual shift.

This analysis was first used by the EC in its September 2018 Apple/Shazam decision, where it recognised the increasingly important role of user data in the digital music industry.[6] After an in-depth investigation, the EC found that the transaction was not likely to result in anticompetitive harm given the multiple alternative providers of data with comparable features when assessed against the four Vs.[7] It is both uncertain whether this is the test that will be applied by the EC when assessing Google/Fitbit, and if the same conclusion would be reached given the inherently personal and sensitive health data involved.

United States

While the US antitrust agencies have challenged transactions where the merging parties were competitors for highly specialised datasets, the agencies have been more hesitant to challenge acquisitions of datasets that were easily replicated or more widely available.

Transactions that resulted in an enforcement action typically involved datasets that are difficult to gather and sold as a service. For example, in Nielsen/Arbitron back in 2013, the FTC challenged the merger of two leading television and radio audience measurement services.[8] A key component of the audience measurement data was that it involved a large infrastructure of measurement devices placed with a representative panel of individual consumers. Because this infrastructure could not be easily replicated by new entrants and a new entrant could not easily replicate the reputation for quality held by the merging parties, the FTC required divestitures. Similarly, in Thomson/Reuters, the DOJ required divestitures to resolve competitive concerns with the merger of two leading providers of financial data to institutional users.[9] In this case, the DOJ noted that institutional users of financial data rely on many years’ worth of uniformly calculated, error-checked data, which Thomson and Reuters were uniquely situated to provide.

On the other hand, transactions that the agencies have cleared without remedies typically involve ‘big data’ sets that result from consumers using technology services and providing voluminous amounts of personal data. These datasets are not considered unique or difficult to replicate because of the ubiquitous data collection in e-commerce. The lack of uniqueness of a dataset was a key consideration in the FTC’s review of Amazon/Whole Foods. Parties opposed to the acquisition were vocal in their allegations that the incremental addition of data about Whole Foods’s customers to Amazon’s existing data reserves would result in monopolisation of markets in which Amazon is active. This theory was, however, rejected by the FTC, which found that the acquisition would not provide Amazon with data that would give it a strong competitive advantage as it was neither unique to Whole Foods nor particularly meaningful in the competition between Amazon and other retailers, such as Walmart.[10] Bruce Hoffman, then-Director of the Bureau of Competition at the FTC, supported a focus on a qualitative rather than quantitative analysis of data noting that, when dealing with issues of ‘big data’ in mergers, ‘the relevant question for antitrust is whether the data of the two firms is a key differentiator and whether other firms that compete with them cannot replace the competition that would be lost from the merger.’[11]

Before Amazon/Whole Foods, the FTC dismissed concerns of anticompetitive harm arising from the combination of datasets in Google/DoubleClick, noting that ‘the evidence does not support the conclusion that the aggregation of consumer or competitive information accessible to Google as a result of its acquisition of DoubleClick is likely to confer market power,’ since sensitive information, such as pricing data, was little in volume and lacked the completeness to provide Google with any competitive advantage. Much of the data in question was also already available to Google as well as to Google’s competitors, thereby allowing them to compete effectively.[12]

More recently, the FTC approved the Facebook/WhatsApp merger without raising competition concerns, but instead threatened future action if Facebook did not live up to its consumer protection commitments with the aim of protecting the privacy of WhatsApp user data.[13] A subsequent change in WhatsApp’s privacy policy in 2016 (which incidentally also triggered the European Union’s procedural fine for providing false information during its investigation) was subsequently confirmed as subject to review by the FTC;[14] however, no enforcement appears to have taken place.

The DOJ, like the EC, also continues to investigate Google’s proposed acquisition of Fitbit after reportedly increasing its scrutiny in April by issuing civil investigative demands to the parties seeking documents and other information to inform its competitive assessment.[15]

Vertical concerns – input foreclosure and ‘chilling’ of innovation

Both US and EU antitrust regulators have considered whether mergers between an upstream market player with a large dataset and a downstream user of such data could result in foreclosure of other downstream players who require access to this data to compete. The assessment of vertical data concerns follows a relatively well-established legal template and does not generally involve novel legal concepts. If an input is important and you can win customers by withholding that input from your downstream rivals, while new tools may be required to determine the ability and incentive to withhold that input, the conceptual assessment is not materially different whether you are considering data, or nuts and bolts.

European Commission

As part of its review of Microsoft/LinkedIn, the EC investigated whether Microsoft could restrict access to LinkedIn’s database of user data for the purposes of developing machine learning systems in competing customer-relationship management (CRM) software solutions, thereby chilling innovation in the market. The EC rejected these concerns on the basis that, pre-transaction, LinkedIn did not make this data available to third parties, and accordingly, no change would be brought about by the transaction. The EC found that Microsoft’s CRM competitors were already innovating in this space via alternative data providers; therefore, any potential for a chilling effect on innovation was dismissed.[16] In its ongoing Google/Fitbit review, the EC is similarly investigating whether Google would have the ability and incentive to degrade the interoperability of the wearables devices of Fitbit’s competitors with Google’s own Android operating system (eg, by disabling certain functionalities or preventing the installation of certain apps). Earlier in its review, the EC also circulated market questionnaires to users of health data probing whether the transaction could limit such users’ access to Fitbit’s health data, and what impact that would have.

United States

Historically, the US authorities were more sceptical about vertical theories of harm in merger cases, considering that harm is less likely compared to horizontal mergers, while there can be material benefits in terms of efficiencies. However, this historical scepticism may change in the future given the release of the new FTC/DOJ Vertical Merger Guidelines in June 2020.[17] These new guidelines will likely ease the burden on the FTC and DOJ in alleging vertical harm in digital markets by altering the proof required to show harm to a downstream market that has data as an upstream input. In particular, the agencies no longer need to formally define both an upstream and a downstream market for vertical cases. Instead, the new guidelines allow the agencies to define one market where competition is harmed and a ‘related product’ that will impact competition in the harmed market. This likely eases the burden in cases involving data because the agencies had difficulties with formal market definition for data as an input product due to the unique characteristics of data.

The future for data assessments in merger cases

Commissioner Vestager’s comments when opening the in-depth investigation into Google/Fitbit (and on multiple other occasions) give a strong indication of continued scrutiny of big data in merger control stating that the EC needed to ‘ensure that control by Google over data collected . . . as a result of the transaction does not distort competition’, a concern that could be applied by analogy to any future data-related transaction.[18]

In the United States, by contrast, though data issues have been considered in merger cases, there has generally been scepticism of the scope of potential anticompetitive harm. This, however, seems set to change following the FTC’s issuance of special orders to Alphabet, Amazon, Apple, Facebook and Microsoft in February 2020 requiring each company to provide information and documents on any transaction consummated between 2010 and 2019.[19] In addition, the Antitrust Subcommittee of the US House of Representatives recently conducted a hearing that questioned the CEOs of Alphabet, Amazon, Apple and Facebook, on a number of topics including past acquisitions. As a result, data-related concerns in the merger sphere may appear more brightly on the US regulators’ radar in the near future.

Unilateral conduct – data and dominance

Requiring powerful firms to share data – ‘essential facilities’

European Union

In the European Union, article 102 TFEU prohibits abuses of dominant positions, breaches of which allow the EC to fine companies up to 10 per cent of their global turnover. Data was first considered in an abuse of dominance context in IMS Health. IMS generated reports of regional sales data of pharmaceutical products and had refused to license the structure in which this data was presented to its competitor (NDC), arguing that it was protected by copyright. The EC considered IMS had abused a dominant position and ordered IMS Health to grant a licence to use the structure to all its competitors. This case came to the European Court of Justice in 2004; the Court applied the established legal principle of ‘essential facilities’, normally applied to infrastructure such as ports or telecom networks, namely whether a certain structure is indispensable for a potential competitor to gain access to a market. The Court indeed found that refusing access to a dataset could be an abuse of dominance based on the following three limbs: NDC intended to offer new products for which there was consumer demand; IMS’s refusal to allow access was not objectively justified; and IMS’s refusal effectively eliminated all competition in the relevant market.[20]

Interestingly, there has been little development of the case law in the European Union for data-related abuses of dominance since IMS Health. The issue is hotly debated, however, focusing in particular on whether the essential facilities doctrine sets the bar too high to demonstrate an infringement, whether it confused different legal principles and whether dominance can come simply from having a large dataset, compared to the traditional starting point being based on having a market share of 40 per cent or more. In Germany, by contrast, pending national legislation proposes to broaden the essential facilities doctrine by explicitly referencing access to data, thereby allowing the FCO to sanction companies for hindering data portability.

United States

The United States, despite also sanctioning monopolies under section 2 of the Sherman Act, treats the notion of an ‘essential facilities’ doctrine more dubiously.[21] The doctrine has not been formally recognised by the US Supreme Court, who, in its 1985 Aspen Skiing judgment, held that firms have no general obligation to cooperate with rivals.[22] The Supreme Court’s subsequent judgment in Trinko largely upheld this position but left open the possibility that there could be some obligation to interact with rivals under very specific circumstances.[23]

Within the data context in particular, US regulators have generally been reluctant to require powerful competitors to share data. The DOJ antitrust department’s then-deputy assistant attorney general Bernard A Nigro Jr noted in December 2017 that: ‘forced sharing of critical assets reduces the incentive to invest in innovation’.[24] Delrahim has also expressed reservations around introducing an essential facilities doctrine at all, let alone specifically in relation to data, stating that: ‘[i]n the United States . . . we do not generally require firms, even dominant ones, to deal with competitors. I am not yet convinced that we should have different rules for data’. In his view, this is justified on the basis that: ‘[a] firm that amassed data because it created a more innovative or efficient product should not be punished for its success by having to share the fruits of its labor and investment with competitors.’ In particular, Delrahim posits that antitrust authorities and courts are not well equipped to determine factors around the suitable sharing of data between competitors, but that this can be determined by ‘free and competitive markets’ instead.[25]

Data use as an abusive conduct

European Union

In February 2019, Germany’s Federal Cartel Office (FCO) issued a decision against Facebook which appears to sanction a more speculative harm than that previously assessed in IMS Health.[26]

Having initially announced the probe in early 2016, the FCO found that Facebook abused its dominant position in the market for social networks through its collection of user data from third-party sources, including both Facebook-owned services, such as Instagram and WhatsApp, and other third-party websites. The FCO found that by making such data collection a condition of signing up to its services, Facebook had committed an ‘exploitative abuse’ under German competition law, as a result of ‘inappropriate contractual terms and conditions’. According to Andreas Mundt, president of the FCO: ‘the combination of data sources substantially contributed to the fact that Facebook was able to build a unique database for each individual user and thus to gain market power.’[27] Facebook’s conduct, therefore, resulted in a detriment to consumers, as well as to competitors who were unable to access such a broad volume of data. The FCO prohibited Facebook from combining user data from different sources without voluntary consumer consent, and required that, in the absence of such consent, Facebook must not restrict consumers from the use of its services and must substantially limit its collection of consumer data.

This decision is significant – it recognises data as a key competitive asset, and introduces a novel theory of harm whereby the collection and use of data (including in breach of data protection laws) can constitute an abuse of dominance. Despite this theory being initially called into question in August 2019 by the Dusseldorf Higher Regional Court following a suspension of the FCO’s decision,[28] the FCO’s findings were vindicated following a dismissal of this judgment by the Federal Supreme Court in June 2020 who confirmed the FCO’s finding of Facebook’s abuse of dominance.[29] Reacting to the judgment, Mundt reaffirmed the goal of the FCO’s decision as giving ‘the sovereignty to the users, the consumers, over their data, not to a dominant company that makes the choice for you’.[30] Facebook’s substantive appeal against the FCO’s decision is still pending before the Dusseldorf Court and is likely to be heard in late 2020 or early 2021.

There is every possibility that other European competition agencies may try to adopt a similarly expansive view of data abuses; indeed article 102 TFEU explicitly envisions that unfair trading conditions[31] may constitute exclusionary abuses of dominance. The EC’s investigation into Amazon’s data practices first announced in July 2019 may be an indication that the EC is willing to test this previously underused provision. In this investigation, the EC is investigating whether: as a retailer, Amazon’s use of accumulated marketplace seller data affects competition; and, as a marketplace, Amazon’s use of competitively sensitive marketplace seller information affects its selection of winners for its ‘Buy Box’ (where retailers are displayed prominently and from which most orders are made).[32] In particular, the EC is concerned that Amazon could be using data from sellers on its platform to determine ‘the new big thing’, or ‘what is it that people want, what kind of offers do people like to receive, what makes them buy things’,[33] thereby giving Amazon a competitive advantage. No further investigative steps have yet been taken publicly by the EC on this case, although there were rumours in June 2020 that Amazon would receive a charge sheet in the form of a statement of objections from the EC in this investigation.[34]

United States

The US authorities have to date imposed fines for data offences on a stand-alone basis rather than as antitrust infringements. In July 2019, the FTC reached a US$5 billion settlement with Facebook for allegedly violating a 2012 FTC order by deceiving its users as to their ability to control the privacy of their personal information. As well as the monetary fine, the FTC also imposed restrictions on Facebook’s operations and a restructuring requirement to ensure protection of consumer privacy.[35] Unlike the FCO’s approach in Germany, and the potential extension of such an approach across the European Union, this sanction only related to a breach of consumer privacy rules and not on the basis of competition law, maintaining a clear demarcation between these areas of law.

Data in cartel investigations – new frontiers

Article 101 TFEU prohibits unlawful agreements between parties which prevent, restrict or distort competition, including through price-fixing or market-sharing. As with breaches of Article 102 TFEU, the EC can fine companies up to 10 per cent of their global turnover for such agreements. In the United States, the DOJ’s Antitrust Division similarly focuses on enforcement against hardcore cartels involving price-fixing, bid-rigging and market allocation under section 1 of the Sherman Act, often imposing significant criminal as well as civil sanctions.

Unlike merger reviews and investigations into unilateral conduct, the scrutiny of data by competition authorities in the investigation of cartels or horizontal agreements have to date been more rare. This is nonetheless a burgeoning area for competition regulation in the European Union and United States.

European Union

In the European Union, the EC envisions the possibility of a breach of article 101 TFEU in its ongoing Amazon probe announced in July 2019. This could, for example, be through the possibility for Amazon’s collected data to be shared among its marketplace sellers, leading to exchanges of competitively sensitive information and effectively rendering the marketplace a price-fixing platform.

Moreover, the accumulation of substantial troves of data by companies may allow them to develop algorithms to maintain or ‘run’ cartels. This possibility for algorithmic cartel behaviour has been considered in recent years by both EU and US competition authorities. In the European Union, authorities have noted that traditional cartels where competitively sensitive data is exchanged directly between competitors to, for example, fix prices, may now be evolving into automated price-fixing via algorithms. Commissioner Vestager commented in early 2017 on the potential for algorithms to develop: ‘automated systems that monitor, and even adjust, prices automatically’, which ‘could be used to make price-fixing more effective’.[36] These concerns are being explored further by the EC in its consultation for a new competition tool launched in June 2020, where the potential for the EC to pre-emptively intervene in markets with a ‘structural lack of competition’ is being considered.[37] Such markets are identified as including those prone to tacit collusion or those where pricing algorithms are prevalent, with the consultation exploring the possibility for EC intervention in the absence of any competitive harm. The possibility for the EC to intervene in respect of anticompetitive algorithmic behaviour therefore remains a continued focus of its digital enforcement agenda.

At a national level, the UK Competition and Markets Authority indicated in March 2020 that the use of algorithms by dominant platforms is a matter for concern, and can ‘destroy’ competing small businesses.[38] The head of the Portuguese competition authority also noted in February 2020 that online retailers using pricing algorithms that either directly or indirectly lead to pricing collusion should be held responsible for any anticompetitive harm arising as a result.[39]

United States

The United States has also echoed concerns regarding potential algorithmic cartel behaviour in its contribution to the Organisation for Economic Co-operation and Development’s May 2017 report on Algorithms and Collusion. Here, the United States noted that, while algorithmic pricing can on the one hand ‘be highly competitive by facilitating rapid competitive response’, on the other hand, ‘computer-determined pricing may be susceptible to coordination, just as human-determined pricing can be.’[40] By way of example, the contribution suggests that there may for instance be an antitrust infringement where competing firms enter into agreements with a single firm to use a particular pricing algorithm, with the common understanding that all other competitors would use the same such algorithm.[41]

Interestingly, US authorities have already sanctioned such algorithmic cartel behaviour in two instances. First, the DOJ entered into a settlement with six airlines in 1994 who had used a jointly owned computerised booking system to reach overt price-fixing agreements.[42] Second, the DOJ charged two executives and an e-commerce retailer in a price-fixing conspiracy where algorithms were used to fix poster prices sold on Amazon Marketplace. In this case, which was also sanctioned by the CMA,[43] one of the conspiring competitors programmed its algorithm to find the lowest price offered by another competitor for a particular poster, before then setting its price slightly lower. The second conspiring competitor then programmed its algorithm to match the first conspirer’s price, thereby eliminating competition between them for these poster sales.[44] The competitors therefore used automated repricing software to agree not to undercut each other’s prices, thereby stifling competition in the market.

Just as EU regulators are moving towards scrutinising algorithmic cartels and, by implication, scrutinising companies possessing significant amounts of data that could allow for the development and operation of such anticompetitive algorithms, the United States has also expressed continued concern regarding the anticompetitive nature of such conduct, implying the possibility for similar sanctions in future.

Continuing scrutiny of data in competition regulation

Data as currency

As well as being reviewed as a parameter of competition, data could also be considered as a currency where free services are investigated. Vestager recognised this possibility in her statement to US lawmakers in July 2020, noting that ‘it has become commonplace to refer to data as the new currency of the digital economy’ and emphasising the dangers to competition arising out of the accumulation and exploitation of ‘big data’ sets by large digital platforms.[45] In practice, the EC recognised the value of data provided in exchange for general search services in its Google Shopping decision.[46] German competition law also now expressly recognises that competition law markets may exist if big data services are offered without monetary reward.[47]

In the United States, while Delrahim acknowledged that ‘data has economic value,’[48] he has also expressed caution against the ‘temptation’ to use data as a currency, given the lack of uniform value that can be assigned to data unlike monetary currency, which can be more straightforwardly calculated. In addition, he notes that ‘it’s not necessarily the case that the more data a platform extracts, the higher the “price” on consumers.’[49]

Market investigations and task forces

European Union

There are numerous recent market studies and other initiatives by regulators that indicate the possibility for greater consideration of data aspects in future competition investigations:

  • The CMA has concluded its market study into Google and Facebook’s digital advertising practices launched in July 2019, calling for a ‘new pro-competitive regulatory regime to govern the behaviour of major platforms funded by digital advertising’. This includes suggested mechanisms to control Facebook and Google’s ‘unmatchable access to user data’, including requiring Google to open its data to competing search engines so as to allow them to improve their algorithms and compete effectively; and potentially even ordering a separation of platforms where required to ‘ensure healthy competition’.[50] The CMA’s newly established Digital Markets Taskforce has now been tasked with reviewing the conclusions of the study in further detail and considering the necessary practical next steps, some of which are expected to be revealed at the end of 2020.[51]
  • The EC reportedly issued questionnaires to online operators in November 2019 investigating Google’s data collection and monetisation activities.[52] It has also issued similar questionnaires to Facebook regarding its Marketplace service for classified ads and the way Facebook gathers data. Interestingly, Facebook has appealed such requests to the EU Courts citing their lack of legal clarity and infringement of privacy rights (given the personal nature of the specific data requested by the EC).[53]
  • Two recent consultations launched by the EC also consider data aspects of competition investigations:
    • The first is the consultation into the new competition tool discussed above which, as well as considering the potential for pre-emptive EC intervention in respect of algorithmic cartel behaviour, also considers whether such intervention is necessary in respect of anticompetitive monopolisation strategies including through a limitation of access to data as a key input. In Vestager’s July 2020 statement to US lawmakers, she explores the possibility of ex ante regulation arising out of such consultation, including potential ‘data silos’ where large platforms are prohibited from using a particular dataset for certain business purposes to prevent them leveraging their market power. This consultation also forms part of the EC’s broader Digital Services Act package consultation, which is reviewing the possibility for a modern regulatory framework for digital services and online platforms in the EU.
    • The second is the ‘internet of things’ consultation launched in July 2020, where providers of consumer products connected to a network and controlled at a distance (such as ‘wearables’ like Apple Watches or smart home appliances like Amazon’s Alexa) are being probed on the competition aspects of connecting devices to the internet. This includes questions on data-sharing contracts, such as whether there is an obligation to share data, any restrictions on the sharing of such data, what data is gathered and how it is stored and monetised. The EC’s stated aim of this consultation is to ensure that ‘market players are not using their control over such (ie, user] data to distort competition, or otherwise close off these markets for competitors’.[54]

United States

The FTC established a technology task force in February 2019 ‘dedicated to monitoring competition in US technology markets’[55] a task that may well involve scrutiny of data-­related issues. In October 2019, the FTC announced that the task force would be converted into a permanent division of its Bureau of Competition and renamed the Technology Enforcement Division. The FTC described this change as ‘reinforc[ing] the Commission’s commitment to ensuring that consumers benefit from robust competition in evolving technology markets.’[56]

The DOJ announced in July 2019 its opening of a wide-ranging antitrust review of big market players in online platforms, suggesting that Google’s dominance in internet search, Facebook’s in social media and Amazon’s in e-commerce would be subject to antitrust scrutiny.[57] These companies’ access to substantial amounts of data may well play a role in this review.

The FTC is also working on the introduction of ‘Big Tech’ guidance, regarding how to properly apply antitrust laws to conduct by big tech firms.[58] This may also touch on data collection and use issues.

The US House Judiciary Committee’s investigation into competition in digital markets initially commenced in June 2019 is also ongoing (of which the Antitrust Subcommittee hearings questioning the CEOs of Alphabet, Amazon, Apple and Facebook noted above are a part), and suggests the possibility for data-related concerns to feature more heavily on the US regulators’ agenda in the near future.

The future for competition and data – EU v US perspectives

The overarching question framing this debate is how competition and data protection regulation will interact and converge going forward.

At one end of the spectrum, this interaction could be achieved simply by greater cooperation between data protection regulators. The German competition authority, for example, cooperated closely with data protection authorities in its Facebook decision as well as the European Data Protection Supervisor (EDPS). More generally, other competition and data protection representatives in the European Union[59] have consistently called for inter-regulator dialogue and cooperation.[60] The results of the EU-wide data strategy consultation in July 2020 also indicate the potential for industry-wide legislation to, on the one hand, encourage standardisation of data for the purposes of interoperability of different datasets, and on the other hand, ensure individuals and organisations retain control over the data they generate.

At the other end of the spectrum, data offences may actually be considered as antitrust infringements. The FCO effectively took this approach in its Facebook decision;[61] which has since been endorsed by the German Federal Supreme Court. The EDPS has also encouraged competition regulators to use competition enforcement tools to sanction data breaches, given the ability of competition law to ‘rebalance trading conditions and restore their fairness’.[62] As part of her dual role as Competition Commissioner and digital representative, Vestager’s recent statements appear to support an adaptation of competition law enforcement to capture concerns arising out of data practices. In her July 2020 statement to US lawmakers for example, she notes how ‘the shift to a data driven economy . . . will also need a shift in how we look at markets and in particular consumer harm’, recognising that despite data increasing in importance and magnitude in the recent past, the underlying conduct is ‘not new’. As a result, enforcement tools currently at the EC’s disposal ‘can be flexibly adapted to analyse the relevant issues’.

On the contrary, US authorities appear to be more cautious in targeting antitrust investigations against big tech firms on the basis of data issues alone. As Delrahim noted in October 2018, big data does not necessarily present a barrier to entry or prove extensive and unfair market power. In particular, he notes that ‘not all “big data” is “bad,” just as not all big firms are bad’; instead, ‘antitrust agencies need to appreciate differences in data and assess data issues on a case-by-case basis’.[63] Nonetheless, the US authorities’ recently announced investigations targeting big tech firms may imply the possibility for a more in-depth review of data issues in future antitrust investigations.[64] Such an approach is also supported by FTC Commissioner Rohit Chopra, whose recent dissenting opinion in In the Matter of Google LLC and YouTube suggests that companies that ‘ingest so much data’ can then ‘[weaponise such data] to increase barriers to entry for new platforms and businesses, allowing a dominant company to charge higher fees to those operating on their platform with less innovative features and services’. He therefore advocates the need for ‘legal tools to redress harms to competition from poor privacy practices’,[65] interestingly signalling an approach more akin to that of the FCO.

Regardless of the answers to such questions, what is clear is the likelihood of a significant development in data aspects of EU and US competition regulation in the near future.

The authors would like to thank associates Ruba Noorali and Ryan Leske for their invaluable contributions to this article.


Footnotes

1 Case M.7217 – Facebook/Whatsapp, 3 October 2014, (Facebook/Whatsapp).

2 Case M.8124 – Microsoft/LinkedIn, 6 December 2016, (Microsoft/LinkedIn).

3 Facebook/WhatsApp, [184]–[189].

4 In May 2017, the EC fined Facebook €110 million for providing false and misleading information as part of its takeover of WhatsApp, when it incorrectly claimed that it was technically unable to match users’ Facebook and WhatsApp accounts. This was in fact a technical possibility of which Facebook staff were aware at the time of the takeover. See ‘Mergers: Commission fines Facebook €110 million for providing misleading information about WhatsApp takeover’, EC Press Release, 18 May 2017 (available at: https://europa.eu/rapid/press-release_IP-17-1369_en.htm).

5 See ‘Mergers: Commission opens in-depth investigation into the proposed acquisition of Fitbit by Google’, EC Press Release, 4 August 2020 (available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1446).

6 Case M.8788 – Apple/Shazam, 6 September 2018; (Apple/Shazam), section 6.6.

7 Apple/Shazam, [179].

8 Analysis of Agreement Containing Consent Order to Aid Public Comment, In the Matter of Nielsen Holdings N.V., FTC File No. 131-0058 (20 September 2013), https://www.ftc.gov/sites/default/files/documents/cases/2013/09/130920nielsenarbitronanalysis.pdf.

9 Competitive Impact Statement, United States v. Thomson Corp., No. 1:08-cv-00262 (DDC 19 February 2008), https://www.justice.gov/atr/case-document/competitive-impact-statement-207.

10 D Bruce Hoffman, Antitrust in the Financial Sector, Concurrences, 2 May 2018 (available at: https://www.ftc.gov/system/files/documents/public_statements/1408262/hoffman_-_antitrust_in_the_financial_sector_5-2-18.pdf).

11 ibid.

12 Statement of the Fed Trade Comm’n Concerning Google/DoubleClick, FTC File No. 071-0170, at 12–13, 3. Note that the FTC also warned at the end of this analysis that: ‘we want to be clear, however, that we will closely watch these markets and, should Google engage in unlawful tying or other anticompetitive conduct, the Commission intends to act quickly.’

13 Letter to WhatsApp from the Fed Trade Comm’n 2-3, 10 April 2014 (warning about misuse of personal data).

14 Letter from Jah-Juin ‘Jared’ Ho, Division of Privacy and Identity Protection at the FTC to Seventeen Consumer Privacy Groups, 29 September 2016.

15 Josh Kosman, ‘Feds Ramp Up Probe of $2.1B Google-Fitbit Deal Amide Privacy Worries’, N.Y. POST (3 April 2020, 4:26 PM), https://nypost.com/2020/04/03/feds-ramp-up-probe-of-2-1b-google-fitbit-deal-amid-privacy-worries/.

16 Microsoft/LinkedIn, [253]–[277].

18 See ‘Mergers: Commission opens in-depth investigation into the proposed acquisition of Fitbit by Google’, EC Press Release, 4 August 2020 (available at: https://ec.europa.eu/rapid/commission/presscorner/detail/en.htm/ip_20_1446).

19 ‘FTC to Examine Past Acquisitions by Large Technology Companies’, FTC Press Release, 11 February 2020 (available at: https://www.ftc.gov/news-events/press-releases/2020/02/ftc-examine-past-acquisitions-large-technology-companies).

20 Judgment of the Court of Justice in Case C-418/01, IMS Health GmbH & Co OHG v NDC Health GmbH & Co KG, 29 April 2004, [52].

21 Interestingly, US District Judge Lucy Koh held in a May 2019 judgment reviewing Qualcomm’s patent-licensing practices that Qualcomm had a ‘duty to deal’ with its competitors. See FTC v Qualcomm Inc, Case No. 17-CV-00220-LHK (21 May 2019).

22 Bernard (Barry) A Nigro Jr, ‘Big Data and Competition for the Market’, Dep’t of Justice, the Capitol Forum and CQ: Fourth Annual Tech, Media & Telecom Competition Conference (13 December 2017).

23 D Bruce Hoffman, Antitrust in the Financial Sector, Concurrences, 2 May 2018 (available at: https://www.ftc.gov/system/files/documents/public_statements/1408262/hoffman_-_antitrust_in_the_financial_sector_5-2-18.pdf).

24 Bernard (Barry) A Nigro, Jr, ‘Big Data and Competition for the Market’, Dep’t of Justice, the Capitol Forum and CQ: Fourth Annual Tech, Media & Telecom Competition Conference (13 December 2017).

25 Makan Delrahim, ‘Start Me Up: Start-Up Nations, Innovation, and Antitrust Policy’, University of Haifa in Israel, 17 October 2018 (available at: https://www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-remarks-university-haifa-israel).

26 ‘Bundeskartellamt prohibits Facebook from combining user data from different sources’, Bundeskartellamt Press Release, 7 February 2019 (available at: https://www.bundeskartellamt.de/SharedDocs/Publikation/EN/Pressemitteilungen/2019/07_02_2019_Facebook.pdf?__blob=publicationFile&v=2).

27 ibid.

28 ‘Facebook secures interim measures win against German antitrust decision’, Mlex, 26 August 2019.

29 ‘Facebook loses suspension of antitrust decision at top German court’, Mlex, 23 June 2020.

30 Comments by Andreas Mundt at the 4th Innovation Economics Conference – Platforms: The Envelopment Strategy, Concurrences Webinar, 6 July 2020.

31 Article 102(a) TFEU.

32 ‘Antitrust: Commission opens investigation into possible anti-competitive conduct of Amazon’, EC Press Release, 17 July 2019 (available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_19_4291).

33 ‘Amazon faces formal EU probe as investigators escalate inquiry’, Mlex, 16 July 2019.

34 ‘Amazon nears EU antitrust charges over use of data’, Mlex, 11 June 2020

35 ‘FTC Imposes $5 Billion Penalty and Sweeping New Privacy Restrictions on Facebook’, FTC Press Release, 24 July 2019 (available at: https://www.ftc.gov/news-events/press-releases/2019/07/ftc-imposes-5-billion-penalty-sweeping-new-privacy-restrictions).

36 Algorithms and competition, Bundeskartellamt 18th Conference on Competition, Berlin, 16 March 2017 (available at: https://ec.europa.eu/commission/commissioners/2014-2019/vestager/announcements/bundeskartellamt-18th-conference-competition-berlin-16-march-2017_en).

37 See ‘Antitrust: Commission consults stakeholders on a possible new competition tool’, EC Press Release, 2 June 2020 (available at: https://ec.europa.eu/commission/presscorner/detail/en/IP_20_977).

38 ‘Soft power with a hard edge: harnessing the benefits of fast-moving markets’, Speech by Lord Andrew Tyrie, Chair of the CMA at the CMA Digital Markets Event, 3 March 2020 (available at: https://www.gov.uk/government/speeches/soft-power-with-a-hard-edge-harnessing-the-benefits-of-fast-moving-markets).

39 Comments by Margarida Matos Rosa at the OECD Competition Open Day 2020, Paris, 26 February 2020, reported by Mlex on the same date: ‘Retailers should be responsible for algorithms leading to pricing collusion, Portuguese regulator says.’

40 The Organisation for Economic Co-operation and Development, Algorithms and Collusion - Note by the United States, 26 May 2017 (available at: https://one.oecd.org/document/DAF/COMP/WD(2017)41/en/pdf), [4] and [11].

41 ibid. [17].

42 ‘Justice Department settles airlines price fixing suit, may save consumers hundreds of millions of dollars’, DOJ Press Release, 17 March 1994 (available at: https://www.justice.gov/archive/atr/public/press_releases/1994/211786.htm).

43 ‘Online seller admits breaking competition law’, CMA Press Release, 21 July 2016 (available at: https://www.gov.uk/government/news/online-seller-admits-breaking-competition-law); ‘CMA issues final decision in online cartel case’, CMA Press Release, 12 August 2016 (available at: https://www.gov.uk/government/news/cma-issues-final-decision-in-online-cartel-case).

44 US v Trod Limited, No. CR 15-0419 WHO, ECF No. 41, Plea Agreement (ND Cal 11 August 2016).

45 Committee on the Judiciary, Subcommittee on antitrust, commercial and administrative law, United States House of Representatives, Statement by Margrethe Vestager, Executive Vice-President, European Commission, 30 July 2020 (available at: https://www.euractiv.com/wp-content/uploads/sites/2/2020/07/Statement-EVP-Vestager-House-SubCommittee-30-July.pdf).

46 Case AT.39740 – Google Search (Shopping), 27 June 2017, [157].

47 E-Commerce Competition Enforcement Guide, ‘European Union – Data-related Abuse of Dominance’, GCR, 7 December 2018.

48 Makan Delrahim, ‘Blind[ing] Me With Science: Antitrust, Data, and Digital Markets’, Harvard Law School, 8 November 2019 (available at: https://www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-remarks-harvard-law-school-competition).

49 Makan Delrahim, ‘Start Me Up: Start-Up Nations, Innovation, and Antitrust Policy’, University of Haifa in Israel, 17 October 2018 (available at: https://www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-remarks-university-haifa-israel).

50 ‘New regime needed to take on tech giants’, CMA, 1 July 2020 (available at: https://www.gov.uk/government/news/new-regime-needed-to-take-on-tech-giants). The full report is available here: https://www.gov.uk/cma-cases/online-platforms-and-digital-advertising-market-study.

51 ‘Google, Facebook may learn what UK adtech enforcement is in store by year’s end’, Mlex, 14 July 2020.

52 ‘Google draws fresh EU scrutiny over data-gathering practices’, Mlex, 27 November 2019.

53 Cases T- 451/20 and T-452/20 lodged before the General Court on 15 July 2020.

54 See ‘Antitrust: Commission launches sector inquiry into the consumer Internet of Things (IoT)’, EC Press Release, 16 July 2020 (available at: https://ec.europa.eu/commission/presscorner/detail/en/IP_20_1326).

55 ‘FTC’s Bureau of Competition Launches Task Force to Monitor Technology Markets’, FTC Press Release, 26 February 2019 (available at: https://www.ftc.gov/news-events/press-releases/2019/02/ftcs-bureau-competition-launches-task-force-monitor-technology).

56 Patricia Galvan & Krisha Cerilli, ‘What’s in a Name? Ask the Technology Enforcement Division’, FTC Blog Entry, 16 October 2019 (available at: http://www.ftc.gov/news-events/blogs/competition-matters/2019/10/whats-name-ask-technology-enforcement-division).

57 ‘Justice Department announces broad antitrust review of big tech’, Washington Post, 23 July 2019 (available at: https://www.washingtonpost.com/technology/2019/07/23/justice-department-announces-antitrust-review-big-tech-threatening-facebook-google-with-more-scrutiny/).

58 ‘FTC preparing Big Tech guidance; also analyzing consumer welfare standard, joint ownership’, Mlex, 10 September 2019.

59 ‘Data Protection and Competitiveness in the Digital Age’, Brussels, 9 July 2019 (reported by Mlex, ‘Competition, data-protection officials seek more cooperation to tackle privacy issues’, 10 July 2019). See also similar comments from the head of the UK’s Information Commissioner’s Office in June 2020 at the OECD ‘Consumer data rights and competition’ event in Paris (reported by Mlex, ‘Data-focused mergers need privacy, competition authorities to cooperate, Denham says’, 9 June 2020).

60 European Data Protection Supervisor, 2018 Annual Report, page 47 (available at: https://edps.europa.eu/sites/edp/files/publication/ar2018_en.pdf).

61 The FCO reviewed applicable GDPR provisions in detail, finding that consumer privacy rights were breached since Facebook had no justification to collect the relevant data without consent. See Decision under section 32(1) German Competition Act (GWB), B6-22/16, section II(3).

62 ‘This is not an article on data protection and competition law’, Giovanni Buttarelli, EDPS, Competition Policy International Antitrust Chronicle, February 2019.

63 Makan Delrahim, ‘Start Me Up: Start-Up Nations, Innovation, and Antitrust Policy’, University of Haifa in Israel, 17 October 2018 (available at: https://www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-remarks-university-haifa-israel).

64 Attorneys general from 48 states announced an investigation into Google for potential antitrust violations in September 2019 (see ‘Amazon, Apple, Facebook, Google under House microscope over antitrust concerns’, Mlex, 13 September 2019). Similar investigations were announced against Facebook also in September 2019, including into determining ‘whether Facebook’s actions may have endangered user data, reduced the quality of consumers’ choices or stifled competition’ (see ‘State AGs open antitrust probe into Facebook’, Mlex, 6 September 2019).

65 In the Matter of Google LLC and YouTube LLC, FTC File No. 1723083, Dissenting Statement of FTC Commissioner Rohit Chopra, 4 September 2019.

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