21 January 2016

No competition issues raised by companies’ use of big data, according to Competition Commissioner

The EU Commissioner for Competition, Margrethe Vestager, has stated that at this stage, the European Commission has not found any competition issues in companies' use of big data, but that it continues to keep this area under review. In a speech given on 17 January, Vestager discussed the interplay between the role of data protection rules in protecting privacy and the role of competition in incentivising companies to protect their customers' privacy.

Vestager emphasised the benefits to consumers that derive from companies' use of big data, such as the introduction of search and social media technologies. Such innovations are very often free, with the data provided by consumers to companies acting as a form of “currency”, to use the Commissioner’s phrase. Vestager pointed to competition work which the Commission is undertaking in this area (merger scrutiny over Microsoft's takeover of Skype; proposals for the regulation of digital contracts as part of the Commission’s Digital Single Market Strategy) but she made clear that privacy issues are best dealt with by data protection regulation rather than competition law enforcement. While Europeans' lack of trust in companies’ ability to protect their data may suggest that there may be market issues, Vestager said that the Commission would not intervene until it became apparent that "a company's use of data is so bad for competition that it outweighs the benefits".

Besides innovations in search technologies and social networks, the Commissioner mentioned two other benefits of storing and processing big data: cutting company costs so that they can better serve consumers (for example, UPS uses data to shorten its delivery routes) and using data to make recommendations to customers.

Vestager’s position is likely to be welcomed by the UK government, which on 15 January published its response to the Commission’s consultation on digital platforms. In its response, the government says that the existing competition regime effectively addresses any issues posed by the rise of online platforms. The fact that Vestager does not advocate the adoption of any new competition tools by the Commission at this stage in relation to big data aligns with the UK government's view.

Vestager concluded by saying that a world of big data does not require a different competition rulebook. This is because the role of competition law has not changed. Its role will be to keep "digital markets level and open", to ensure that innovative products are offered to consumers at "the right prices" and to allow digital entrepreneurs "a fair shot at success".

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